Lending to Saudi MSME sector expected to grow in 2022
RIYADH: The CEO of NMC Healthcare, Michael Davis, deals with patients’ pain all the time. And now he feels the pain himself in many ways.
The largest private healthcare provider in the United Arab Emirates is making a series of painful choices to restructure the business starting with its exit from Saudi Arabia.
“Leaving Saudi Arabia was a very difficult and painful decision for me personally and for the organization,” he told Arab News in an exclusive interview.
“Since I moved to the United Arab Emirates 10 years ago, I have been to Saudi Arabia over a hundred times. I probably went to parts of Saudi Arabia where other Saudis might not have gone,” he added.
Davis said the company may consider re-entering the Saudi market after selling its stake to Saudi Medical Care Group.
“When we left the Saudi joint venture, we knew it was in the best interest of NMC as a whole,” he said, reiterating his belief that Saudi Arabia is still a crucial market for its business.
“I am still personally very interested in the success of the Saudi portfolio that we came out of. I can also see under this new board and as part of our growth plan, an opportunity later on to re-enter Saudi Arabia, but probably not in the multi-specialty hospital space. Maybe in one of the subspecialty spaces, like long-term care, in vitro fertilization, or cosmetics and aesthetics,” Davis said.
NMC has agreed to the sale of its 53% stake in SMGC, offloading the last of its international businesses as part of a creditor-approved restructuring.
Davis also revealed that NMC has achieved the best financial results since its inception 47 years ago thanks to the board restructuring program and despite the scandal incident.
“In 2020 and 2021, we posted the best operational and financial results the company has seen in its 47-year history. None of us can forget that all of this happened on the brink of the worst pandemic the world has seen in over 100 years. So, over the past two years, the company has struggled with fraud. We successfully managed the administration.
We successfully managed and contributed to the battle against COVID-19 here in the UAE and Oman, and we came out of it much better,” Davis added.
“After entering administration, we received approximately $375 million in funding from our investors. I think that, with the support of 95% of our creditors, is a vote of confidence that basically says ‘we believe in this company,’” he added.
Davis expressed his full confidence in NMC’s ability to overcome all financial difficulties.
“We believe that what we do is relevant, not only from a clinical and social point of view, but also from a financial point of view. This is a company that made more than $1.2 billion in revenue in 2021 and $206 million in adjusted EBITDA. So when you look at these results, it’s a very, very strong company with five and a half million one-on-one patient visits per year. It is an attractive business for any investor,” he noted.
He added that the 34 assets of NMC have been transferred to a new holding company, which means that NMC Healthcare is in a better and stronger position and is now more transparent.
A new business plan
He revealed that part of the board’s three-year plan was to seek out new buyers or investors.
“So part of our business plan is that we believe that within the next three years we will have the business well positioned to be sold. At this point, we might consider a financial investor, a healthcare-focused private equity group. It can be someone local, someone international. It could also be a strategic investor in healthcare,” Davis explained.
He added that there are many people who could be involved in this investment.
“Currently what we’re doing is focusing specifically on business continuity and stability and making sure we’re delivering the best value to all of our stakeholders,” Davis said.
He noted that the plan includes the company’s new owners, their patients, their employees and the community that has supported NMC over the past two years.
“It is important for all of us to understand that even over the past two years we have seen an average of between five and six million patients, both in 2020 and 2021, and 60% of the patients who come to the facilities of health of NMC are recurrent patients. . It’s an important vote of confidence,” Davis said.
Protect the brand
He recalled that NMC has multi-specialty hospitals and clinics.
“We have the largest integrated in-vitro fertilization business in the Middle East, performing almost 5,500 rounds of IVF cycles per year in the UAE. We have a very large aesthetic and cosmetic surgery business with 19 aesthetic and cosmetic surgery centers across the UAE and Oman,” Davis noted.
The first thing Davis did as CEO of NMC was create a firewall between what was happening in corporate office and the legal and restructuring issues that were happening and what was happening at the bedside and everywhere in the United Arab Emirates and Oman, noting that his healthcare company has 12,000 employees, including 2,000 doctors.
“And while we at corporate headquarters were worried about banks and creditors and lawyers and litigation, all those things surrounding administration, those 12,000 employees were getting up every day and putting on their lab coats and their scrubs and put on their stethoscopes and walked into hospitals and clinics and, day in and day out, taking great care of patients,” Davis said.
For Davis, there are important lessons to be learned from the pandemic that has swept the world.
“I think the biggest lesson I’ve learned from COVID is to believe in science, listen to scientists, listen to experts, trust our instincts, and I never want to be the last person. to implement the change. If you look at what Saudi Arabia and the UAE have done during the pandemic, we have done so much better than the rest of the world in so many ways,” he concluded.