Hospital builder NMC Health has found a giant pile of debt it did not know it had, more than doubling the amount it owes creditors, after a major scandal over who actually owns the company.
The Abu Dhabi-based company said that it was 2.7 billion US dollars (£2.1 billion) further in the red than it thought. It also warned that some of the money could have been used for “non-group purposes”.
In a statement to shareholders, the FTSE 100 company said: “In addition to 2.1 billion dollars [£1.6 billion] group debt reported at 30 June 2019, the company has identified over 2.7 billion dollars in facilities that had previously not been disclosed to or approved by the board.”
It brings the scandal-hit firm’s total debt to around five billion dollars (£3.9 billion). But the board warned that even this figure could be wrong.
“The work on verifying this figure is ongoing,” the business said.
It added: “NMC is continuing to work with its advisers to understand the exact nature and quantum of the undisclosed facilities.
“The board believes that some proceeds may have been utilised for non-group purposes.”
In addition the business, which builds and runs hospitals in the Middle East, said it “recently successfully completed the payment of its February payroll”.
It had reported a strong operating start to the year as coronavirus fears grip the world.
Bloomberg reported on Tuesday that the Abu Dhabi government-owned National Health Insurance has stepped in to help NMC pay its salaries and other invoices.
NMC has been struggling to calm investor nerves since activist Muddy Waters published a report alleging wrongdoing at the company in December.
Trading in its shares was suspended earlier this year after it became unclear how many shares founder BR Shetty owned, and how many were held by two businessmen known as the Bin Buttis.
Following the news on Tuesday, Muddy Waters tweeted: “Wow! [NMC] has identified over 2.7 bln in undisclosed debt facilities, which exceeds reported debt of 2.3 bln. The 5 bln known gross debt is apparently equal to net debt, meaning cash is roughly…Zero. On the other hand, it’s off to a “strong operating start to the year”!”