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03 October 2023

UAE's NMC Health talking to banks over possible loan

Nearly 280,000 people to benefit from the clean energy projects. (Ashok Verma)

By Reuters

The UAE-based healthcare provider NMC Health, founded by billionaire Indian entrepreneur BR Shetty, is in talks with bankers for a potential long-term loan, four sources with knowledge of the matter said.

The London-listed company, which operates general and specialist hospitals, pharmacies and medical centres, has held talks with both local and international lenders about funding options, the sources said, with one adding the talks had been taking place since November.

The sources did not say what NMC, which had total group debt of $292.2 million as of Sept. 30, would use the money for.

A number of UAE entities have sought new loans or refinanced existing debts in recent months, as lenders cut rates and loosen lending terms to secure business, with cash-rich local banks facing competition from international lenders returning to the region after withdrawing in the wake of the global financial crisis.

The sources speculated NMC could raise anything from $600 million to $800 million, with the tenor of the loan likely to be in the longer-term range of between five and seven years.

A decision on whether to proceed with the loan and which banks will help arrange the deal is expected around the end of this month, two of the sources said.

NMC Health declined to comment. The sources spoke on condition of anonymity as they are not authorised to speak to the media.

Abu Dhabi-based NMC is one of the largest private sector healthcare providers in the UAE and is expected to see rising demand from a boom in so-called "lifestyle diseases" in the Gulf, as higher incomes and unhealthy diets create health problems.

The healthcare provider in August posted a 27 percent jump in first-half net profit to $40.9 million, aided by higher occupancy across its hospitals.

In a note published on Monday, brokerage Jefferies reaffirmed its "buy" rating and price target of 600 pence after visiting NMC's facilities in the UAE, noting strong upside potential if it could achieve the same capacity and profitability in its new hospitals as its existing facilities.