Educomp jumps on buzz it may sell schools business to Aditya Birla Group

Educomp Solutions rose 4.77% to Rs 34.05 at 11:50 IST on BSE on a media report that Aditya Birla group is in talks to acquire the schools business of the company.

Meanwhile, the BSE Sensex was down 13.42 points, or 0.05%, to 26,762.27.

On BSE, so far 4.33 lakh shares were traded in the counter, compared with an average volume of 1.14 lakh shares in the past one quarter.

The stock hit a high of Rs 35.75 and a low of Rs 33.60 so far during the day. The stock hit a 52-week high of Rs 43.30 on 13 June 2014. The stock hit a 52-week low of Rs 18.35 on 1 October 2013.

The stock had outperformed the market over the past one month till 23 September 2014, rising 2.85% compared with 1.35% rise in the Sensex. The scrip had, however, underperformed the market in past one quarter, falling 15.25% as against Sensex's 6.97% rise.

The small-cap company has an equity capital of Rs 24.49 crore. Face value per share is Rs 2.

According to the report, the Aditya Birla Group has been in talks to acquire the schools business of Educomp Solutions, once the country's largest diversified education service provider, as the debt-laden company has been restructuring its business portfolio to deleverage its balance sheet.

GEMS Education spearheaded by Dubai-based NRI education billionaire Sunny Varkey and Zee Learn of Subhas Chandra's Essel Group have also shown interest in the business, report added.

However discussions with these prospective buyers are preliminary in nature and there is still no certainty that they would culminate in a transaction. Educomp has roped in Macquarie Capital as its adviser for a transaction, report suggested.

Educomp's subsidiary Educomp Infrastructure & School Management (EISML) runs a nationwide chain of 47 K-12 (kindergarten through 12th grade) schools under three brands. The majority of the schools are company owned. Some also operate as franchisees and joint ventures, report said.

On a consolidated basis, Educomp Solutions reported a net loss of Rs 343.48 crore in Q1 June 2014 compared with net loss of Rs 23.97 crore in Q1 June 2013. Net sales fell 37.6% to Rs 143.64 crore in Q1 June 2014 over Q1 June 2013.

Educomp is the largest Education company in India. Educomp group empowers over 22.8 million learners and educators across ~34,500 schools.

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