Educomp Solutions gets approval for debt restructuring

Co posted a Q3 net loss of Rs 87.6 cr compared to Rs 8.01 cr for the same period last year

In a filing to the Bombay Stock Exchange, Educomp said that the request for restructuring its debts outstanding on reference date (July 08, 2013) comprising Working Capital Debt of Rs 399.04 crore and Long Term Debt of Rs. 83.05 crore with CDR Lenders has been approved by CDR Empowered Group.Education services company Educomp Solutions Ltd today said that it has got an approval for debt restructuring by the Corporate Debt Restructuring (CDR) Empowered Group.

The earlier Board of Directors of the company had approved reference by the Company to CDR Cell for restructuring of its debts in June 2013. The CDR Cell had admitted the Flash Report of Company in its meeting held in July 2013.

The restructuring package agreed with CDR Lenders (led by State Bank of Patiala) envisages extended repayment tenure of 10 years including moratorium period of 2.5 years from Cut-off Date (April 1, 2013) and funding of interest for a period of 2 years from Cut-off Date.

The company posted a third quarter net loss of Rs 87.6 crore for the period ended December 31, 2013 compared to net profit of Rs 8.01 crore for the same period last year.

The company's net sales fell to Rs 155.33 crore for Q3 FY14, down by 37 per cent compared to Rs 271.12 crore for three-months ended December 31, 2012. Sequentially too, there was a 3.7 per cent drop in net sales for December quarter compared to the September quarter.

Shantanu Prakash, CMD, Educomp Solutions had earlier told Business Standard that they are hopeful that FY15 will ease a lot of the current pain in the system and with a new government in place in mid 2014, the economy as a whole and education sector in particular will get a fillip

In 2013, Educomp made two exits in what it calls non-core segments. Earlier this year, the company sold its entire 50 per cent stake in the vocational training firm IndiaCan, to its joint venture partner Pearson. In March last year, they completed the sale of 50 per cent stake in Eurokids International Limited to a group of investors led by GPE India. The company had said it made a profit of Rs 70 crore on this investment, and that the proceeds would be used for its core businesses.