MUSCAT: HSBC Oman on Sunday announced $16 million (approximately OMR 6 million) exposure to troubled NMC Healthcare Group and its sister companies.
The disclosure comes after the Muscat Securities Market on Thursday urged banks and financial institutions inform any ties with the UAE based hospital operator that is now facing scrutiny from regulators and creditors for financial irregularities worth $6.6 million.
In a statement issued to MSM, HSBC Oman said: “In accordance with the guidance received from the MSM, HSBC Bank Oman SAOG, would like to advise that its exposure to NMC Healthcare LLC, a company based in UAE, amounts to approximately USD 16 million, representing approximately 0.2% HSBC Oman’s total assets.”
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Earlier on Thursday, Bank Nizwa had announced its indirect exposure to the UAE based hospital operator that facing a debt of $6.6 billion.
In a disclosure to MSM, Bank Nizwa while revealing that it has “no funding, investments or other facilities” with troubled NMC Health or its affiliate companies Finablr and UAE Exchange, the bank admitted it has a OMR 5 million direct finance ties with its subsidiary ‘Elegant Medical Center LLC’ which was granted for its operations in Oman only. It is worth noting that NMC Health has 34.3% stake in Elegant Medical Center.
What’s the story?
NMC – which recently revised its debt position to $6.6 billion, well above earlier estimates – has seen its stock more than halve in value since December after short-seller Muddy Waters questioned its financial statements.
The turmoil at the group was triggered after a December report by Muddy Waters, which said it had concerns over asset values, cash balance, reported profits, and reported debt levels, as well as possible fraud.
Following suspected fraud and financial irregularities the company’s chief financial officer and chairman have resigned.
NMC Health’s new executive chairman Faisal Belhoul on Saturday called on the company’s creditors to suspend debt repayments and said he would work with authorities in Britain and the United Arab Emirates (UAE) to recover misused funds.
