NMC Health PLC (LON:NMC) has admitted that its debts are at least US$1.6bn higher than previously thought, with a total of 75 debt facilities from over 80 financial institutions now discovered.
The Abu Dhabi based private hospital operator, which is still a FTSE 100 company until the end of the month but is undergoing investigations by authorities at home and in the UK, said its net debt was “around US$6.6bn”, up from “about US$5bn” on 10 March.
Directors are working with advisers, including an external law firm and private investigators, to try and find out the level of debt facilities that had not been disclosed to the board.
Last month, NMC sacked chief executive Prasanth Manghat, sent chief financial officer Prasanth Shenoy on extended sick leave and suspended an unidentified member of the treasury team after an independent review of its finances uncovered “potential discrepancies and inconsistencies” in bank statements, together with supply chain financing arrangements that had not been approved by the board.
Shenoy, who took over from Mangaht as CFO in 2017, has now resigned with immediate effect, the company said on Tuesday.
Unknown knowns and other debt
Investigations over the past two weeks have revealed a further US$0.3bn currently outstanding of facilities which were known to the board as at June 2019, or what hitherto might have been seen as ‘known unknowns’.
On top of that, the latest digging for debt also unearthed another US$0.8bn of facilities, that “had been undisclosed as at June 2019 and unapproved by the board” as well as US$0.4bn of facilities that had been taken out since last June and unidentified, which could both perhaps have been ‘unknown unknowns’.
If that wasn’t enough, the investigations have also revealed US$50mln of cheques written by group companies that “may have been used as security for financing arrangements for the benefit of third parties”.
Last month the review had uncovered a series of "supply chain financing arrangements" had been in place since 2018 and “are understood to have been used” by entities controlled by founder BR Shetty and fellow major shareholder Khalifa Bin Butti, but had not been disclosed to or approved by the board.
This was preceded by the resignations of Shetty as joint-chairman and Khalifa Bin Butti as executive vice-chairman after questions were raised over how much of the company was owned by its founder and major shareholders.
While all this goes on, the operational side of the group is focusing on the coronavirus crisis, with total capacity of 2,207 licensed beds across its hospital network.