NMC Drops After Two Investors Sell Stake Below Market Price
Billionaire BR Shetty’s NMC Plans Independent Review After Short Seller Attack
(Bloomberg) -- NMC Health Plc plunged after two major investors sold $493 million worth of shares well below the market price to reduce their holdings in the troubled health-care group.
The stock fell as much as 20% in London. Former director Saeed Mohamed Butti Mohamed Khalfan Al Qebaisi and Executive Vice Chairman Khaleefa Butti Omair Yousif Ahmed Al Muhairi together sold about 15% of NMC for about 1,200 pence a share.
The hospital operator had a rocky end to 2019 as shares slumped following allegations by Carson Block’s Muddy Waters Capital LLC. The short-selling firm said the company’s financial statements hint at potential overpayment for assets, inflated cash balances and understated debt.
NMC has said that those claims are unfounded and that it will conduct an independent review. Based in the United Arab Emirates, the company owns and operates hospitals in the Middle East.
Khaleefa Bin Butti had pledged NMC shares as collateral against loans, according to a December 2017 filing. The sale may therefore remove a potential overhang on the stock, Morgan Stanley analyst Saul A Rans wrote in a note.
The share sale “pertains only to the means of financing the investors’ shareholdings and not to the company’s operating performance nor long-term prospects,” and both remain long-term holders of NMC, the company said in a statement.
The two investors will retain a combined stake of about 17% in the company and agreed to place their remaining shares in a temporary lock-up. Proceeds from the sale will be used to pay down debt.
Credit Suisse announced the sale Tuesday after the close of London trading. The investors also offered for sale about $75 million worth of shares in Finablr Plc, owner of the Travelex currency exchange service that recently came under a ransomware attack. Finablr shares dropped as much as 20%.
Both NMC Health and Finablr were founded by Abu Dhabi-based billionaire Bavaguthu Raghuram Shetty.
--With assistance from Lisa Pham.
To contact the reporter on this story: Marthe Fourcade in Paris at mfourcade@bloomberg.net
To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John Lauerman
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