x Abu Dhabi, UAESunday 23 July 2017

NMC Healthcare plans $250m London listing

NMC Healthcare shuns local stock markets to list in London, in an effort to secure the funds for expansion of hospitals and clinics in the UAE from emerging market investors.

NMC Healthcare is preparing a US$250 million listing on the London Stock Exchange, shunning local markets to tap deep-pocketed investors overseas. Ravindranath K / The National
NMC Healthcare is preparing a US$250 million listing on the London Stock Exchange, shunning local markets to tap deep-pocketed investors overseas. Ravindranath K / The National

NMC Healthcare is preparing a US$250 million (Dh918.2m) listing on the London Stock Exchange, shunning local markets to tap deep-pocketed investors overseas.

The Abu Dhabi healthcare company run by Dr BR Shetty, will use the proceeds to acquire a medical centre in Dubai, build a day-patient centre and pharmacy in Abu Dhabi, and fund the development of three hospitals in the UAE.

NMC is 30 per cent owned by Dr Shetty, with the remaining shares split between Khalifa bin Butti, Saeed bin Butti and Infinite Investment, a firm jointly owned by the pair.

Whatever funds are left from the share sale will be earmarked for expansion plans around the Middle East.

The listing was the "next logical step" for the company, which has operated in the UAE for 37 years, said Dr Shetty, the founder and chief executive of NMC.

"This will allow the company to develop existing and new facilities, as well as expand into new high-growth markets," Dr Shetty said. "We have specifically chosen London for the IPO given its deep pool of capital and global profile."

The UAE's markets, by contrast, have missed out on large sums of investment because of their inability to secure an upgrade to "emerging market" status by the index provider MSCI.

The deal requires a minimum free float of 25 per cent of the company's shares to satisfy regulatory requirements, implying a valuation of NMC of about $1 billion.

The London listing brought a number of benefits to NMC, not the least of which is access to investors focused on "emerging" and "frontier" markets, said Christopher Laing, the regional head of equity capital markets at Deutsche Bank, which is spearheading the deal.

"By listing in London, they'll get index inclusion - they'll be part of the FTSE 250, and they'll open up their shares to emerging market investors," he said.

NMC disclosed revenues of $443.7m for last year, alongside earnings before interest, taxes, depreciation and amortisation of $70.5m, an increase of 25 per cent on the year earlier.

Deutsche Bank is the sole sponsor, global coordinator and bookrunner on the deal, acting alongside Numis Securities and Shuaa Capital as joint lead managers.

In January last year, NMC sold a 40 per cent stake to Centurion Investment, an Abu Dhabi private equity firm owned by Saeed bin Butti.

Last month, Centurion took a 40 per cent stake in UAE Exchange, a currency exchange founded by Dr Shetty.

The listing has been planned as a premium listing to allay investor concerns about corporate governance in "frontier" and "emerging" market companies and minority shareholder rights, Mr Laing added.

The company has appointed Mark Tompkins, a former chairman of Allied Healthcare International, as an independent non-executive chairman of its board of directors.

He joins Justin Jewitt and Patrick Meade, who have been appointed as independent non-executive directors.

ghunter@thenational.ae

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