UAE's NMC Healthcare in talks to run struggling Saudi hospital

London-listed NMC Healthcare is in talks with the Riyadh government to take over the running of a struggling Saudi hospital, according to four sources familiar with the matter, reports Reuters.

A deal for the Saad Specialist Hospital in Khobar, one of the top cancer treatment facilities in the Gulf, would be a rare instance of a foreign group operating a Saudi hospital.

It would be a test of Riyadh’s plan to bring overseas investors into the healthcare sector under a reform drive, led by Crown Prince Mohammed bin Salman, aimed at restructuring the kingdom’s economy and reducing its dependence on oil revenue.

The Saudi health ministry has asked interested parties to submit bids for the operational licence by the end of this month, said the sources who declined to be named as the discussions are confidential. UAE-based NMC is involved in the process and is considered a frontrunner to win the contract, they added.

Read: Is Saudi’s Bin Salman tackling corruption or making money?

The 750-bed hospital is owned by Saad Group, a conglomerate owned by billionaire tycoon Maan al-Sanea which also operated the facility. But in recent weeks the government has stepped in after the hospital become weighed down by financial problems, said the sources.

The hospital had effectively ceased operating – with the emergency room the last unit of the facility to close last month – due to debts which meant it was unable to pay salaries or contractors, according to the sources.

The government’s intervention coincided with the detention of the al-Sanea by Saudi authorities for unpaid debts, sources have previously told Reuters.

NMC Healthcare and the Saudi health ministry were not immediately available to comment.

Saad Specialist is one of only two hospitals in the kingdom to have a cyclotron, used to help identify cancerous tumours. The ministry is keen to get it re-opened as quickly as possible.

It approached NMC and other healthcare companies a few weeks ago about taking over the running of the facility and conducted a site tour for potential bidders, which number around 10, according to the sources familiar with the matter. The sources did not name any other potential bidders.

Read: Saudi Arabia’s budget deficit to reach $52bn next year