Will Shamsheer Vayalil’s Burjeel buy UAE rival NMC Healthcare

Shamsheer Vayalil, right, with Bill Gates

August 23, 2022

Later this year, Burjeel Holdings may list as a public company, likely on the Abu Dhabi Stock Exchange. Apparently, to help with the process, earlier this month the company announced that its revenues grew by a compound annual 18% during the three years 2019 to 2021. Also, that in 2021, it earned a profit of $63 million on $905 million in revenues.

The vision for Abu Dhabi based Burjeel is “to be the leading healthcare services provider in the Middle East and beyond,” founder and Chief Executive Shamsheer Vayalil said in a statement.  

Burjeel has a portfolio of 16 hospitals, 23 medical centers and 15 pharmacies, along with other medical services, in the United Arab Emirates (UAE) and Oman. Its flagship Burjeel Medical City is a 400-bed facility in Mohamed Bin Zayed City, Abu Dhabi. One of the largest private hospitals in the UAE, it handles oncology and other complex treatments.

Burjeel employs more than 1,200 doctors across five brands Burjeel Hospitals, Medeor Hospital, LLH Hospital, Lifecare Hospital, and Tajmeel, an operator of medical centers. “Healthcare is a basic need, and that need is going to grow,” Vayalil, 45-years-old, said in a statement.

Typically, many UAE and Omani citizens, depending on their wealth, travel to India or the U.S. or Europe for major medical care. Millions of migrant workers in the region have no health insurance coverage and often must return to their homes, mainly in India, Pakistan, Bangladesh or Egypt, when they need major medical treatment.

“What we have to build is more trust for people to believe that…(Burjeel) can offer what is available anywhere in the world,” Vayalil, told CNBC. His focus is to try to “stop or reduce people traveling…(abroad) for treatment.”

In May, Burjeel was spun-off from UAE-based VPS Healthcare (VPS), in the process consolidating VPS’ operations in the UAE and Oman and offering “end-to-end health solutions under a single window,” Vayalil, who is also Chairman of VPS, said in a statement at that time. He announced the spin off at the Burjeel House, on the sidelines of the World Economic Forum Annual Meeting in Davos, Switzerland.

VPS founded 20 hospitals, over 100 medical centers, pharmaceutical manufacturing and other healthcare support services in the Middle East, Europe and India. In India, its holdings include the Rockland Hospital chain in Delhi and the VPS Lakeshore Hospital in Kochi.

In 2006, Vayalil began his career as a radiologist at the Sheikh Khalifa Medical City, a government hospital in Abu Dhabi, after emigrating from India. About a year later, at age 30, he set up LLH Hospital, the first of VPS’ hospitals, “backed initially by his wealthy father-in-law,” retail billionaire M.A. Yusuff Ali, according to Forbes.

Vayalil’s business growth strategy, he told Knowledge@Wharton, was “to go where there were no (medical) facilities available.” And to build hospitals where patients go for heart surgery, knee replacement and other major issues as well as build a network of clinics in malls where patients can go for treatment of minor ailments, monitor their diabetes and participate in wellness programs.

Shamsheer Vayalil Parambath grew up in a business family in Kozikhode, Kerala, India. His father is Hashim Pokkinari and mother Mariyam Barakkool. “My father has been a never- ending source of learning for me,” he told The International Indian, published in the Middle East. “Though a very successful businessman, he is highly devout and a firm upholder of principles and values in both his personal and professional life.”

Vayalil earned his medical degrees in India: an MD in radiology from Shri Ramachandra Medical College, Chennai, and an MBBS from Kasturba Medical College, Manipal. They are both private, for-profit institutions. The current annual fees and costs, for students from India, for an MD course at Ramachandra is around $30,000; the total fees and cost for the MBBS degree is around $100,000. Foreign students are charged higher fees at both places.

“We have always believed that doing good is good business too,” Vayalil and his wife Shabeena wrote in their letter while signing the Giving Pledge. So far more than 230 wealthy individuals and families, from 28 countries, have signed the pledge to voluntarily donate most of their wealth to philanthropy. The Pledge was initiated by billionaires Warren Buffett and Bill Gates.

Vayalil’s net worth is estimated to be $1.3 billion, according to Forbes. While his major donations, if any, are not known, his medical facilities have conducted 1,000 free heart surgeries and thousands of free breast cancer screenings. He has donated to help Syrian refugees and for flood relief efforts in Kerala. In May this year, he gave a $125,000 award to the Kerala men’s soccer team for winning the Santosh Trophy, the state competition in India, tweeting, “What a great match! Congrats, Team Kerala.” In his youth, Vayalil, who exercises regularly, represented Kerala in the inter-state table tennis competition. He has 8,000 followers on Twitter, 39,000 on Instagram and 250,000 on Facebook.

Vayalil and Shabeena, who live in Abu Dhabi, have three sons and a daughter. Shabeena is the daughter of M.A. Yusuff Ali, founder of LuLu Group International, which owns 255 stores, shopping malls and hotels in the Middle East, India and elsewhere. Ali, who migrated from Kerala to Abu Dhabi in 1973, has a net worth of $5.1 billion, according to Forbes. He plans to list LuLu on the stock exchange in 2023.

M.A.Yusuff Ali, founder of LuLu Group International

VPS had previously planned to become a public company by listing in London. In 2019, it dropped the plan, according to Reuters. VPS spinoff Burjeel’s main competitor in the UAE and Oman is NMC Healthcare, the largest private healthcare operator in the Emirates. It was founded in 1975 by Bavaguthu Raghuram Shetty, an immigrant from Udupi, India. Shetty, 80, received several awards including in the UAE and India; for example, he was the first recipient to be awarded the Abu Dhabi Award, the highest civilian distinction of the Emirate Abu Dhabi.

In 2020, NMC Healthcare discovered more than $4 billion in undisclosed debt, entered administration, or bankruptcy proceedings, and was delisted from the London Stock Exchange. Most of the funds were allegedly pocketed by principal shareholders and senior management. Several UAE-based lenders, led by Abu Dhabi Commercial Bank, suffered heavy losses.

In March this year, NMC’s Middle East operations emerged from bankruptcy. "Within the next three years NMC Healthcare will go back on sale - it may be to institutional investors, it can be a strategic investor, it might be a combination of those," NMC Chief Executive Michael Davis told Reuters.

In the UAE and Oman, NMC has more than 12,000 employees and serve more than 5.4 million patients a year, through 11 hospitals and 54 community clinics and specialty care centers. The banks that now own NMC will want the business to be bought by a profitable, well-funded company to try to recover their loans. Also, the rulers of the Emirates and Oman will want NMC to be a stable entity, providing critically needed healthcare services in their Kingdoms.    

Burjeel, assuming Vayalil is interested, could be the strategic buyer of NMC’s Middle East operations. Apparently, Burjeel may have taken on debt to fund its growth in the past. Since inception, it has invested about $1.1 billion including for setting up Burjeel Medical City, artificial intelligence enabled clinical and diagnostic support and digitizing operations. By listing as a public company, Burjeel can raise cash to pay down debt and it could buy medical businesses by paying in stock.   

“We are looking at the next phase of growth,” Vayalil told CNBC earlier this month. Burjeel has appointed JP Morgan, Emirates NBD, EFG-Hermes, and Dubai Islamic Bank as joint global coordinators for its potential public listing – though a final decision has not been made.

In a statement issued by Burjeel earlier this month, Vayalil stated, “Healthcare is a key focus for governments across the Middle East and we look forward to supporting our partners in the UAE…in helping build and enhance their healthcare services and infrastructure.”

Photos: Shamsheer Vayalil courtesy his Twitter and Facebook accounts. M.A.Yusuff Ali courtesy Wikimedia Commons

For access to stories each week, follow on: LINKEDIN or TWITTER or FACEBOOK