Dubai Islamic Bank said on Sunday it has a $541 million exposure to troubled hospital group NMC Health, directly and through a unit, as UAE banks disclosed ties to the firm after a lender asked for it to be put into administration.
NMC - which recently revised its debt position to $6.6 billion, well above earlier estimates - has seen its stock more than halve in value since December after short-seller Muddy Waters questioned its financial statements.
London-listed NMC shares were suspended in late February.
Shares in DIB were down 4.8 percent in afternoon trade after the disclosure, underperforming the Dubai stock index, which was down about 2.2 percent.
Abu Dhabi Commercial Bank, which has a $981 million exposure to NMC Health, has asked a court in Britain to put the company into administration to safeguard its future.
NMC Health’s new executive chairman on Saturday called on the company’s creditors to suspend debt repayments and said he would work with authorities in Britain and the United Arab Emirates (UAE) to recover misused funds.
Shares of ADCB were trading 3.1 percent lower in afternoon trade.
Abu Dhabi Islamic Bank said in a separate disclosure it had extended $291.4 million in financing to NMC Healthcare LLC UAE, guaranteed by NMC Health, and that it had an additional $31 million exposure to Islamic bonds issued by NMC.
ADIB shares were down 4.9 percent on Sunday.
“It doesn’t come as a surprise to find that leading banks in the country have extended facilities and invested in sukuk issued by NMC, the leading private healthcare provider in the UAE,” said Marie Salem, head of institutions at Daman Securities.
DIB said it was now in discussions with NMC and its advisors to ascertain the group’s financial position and identify potential measures to address its governance and financial issues.
The aggregate exposure to NMC constitutes as of March 31 is approximately 0.7 percent of DIB’s total assets, DIB said.