BSE-listed education company Educomp Solutions has initiated discussions with its lenders and has approached the Corporate Debt Restructuring (CDR) forum to restructure its rupee debt to correct the asset liability mismatch on its balance sheet, the company informed the BSE in a statement.
The company has also approached the CDR forum for restructuring of debt in its K-12 business. The K-12 business is its second major business and is operated through its subsidiary, Educomp Infrastructure and School Management Ltd.
Shantanu Prakash, chairman and MD, Educomp Solutions, said, “Educomp has over the years built high quality intellectual property/physical infrastructure in K-12 and higher education segments, which involves significant capital investments. The company, in consultation with its lenders, has decided to undertake a debt restructuring exercise under the CDR mechanism to address the asset liability mismatch in the business. Our lenders are supportive of our efforts to reach an optimal debt structure.”
The debt restructuring exercise will enable the company to address liquidity issues by matching the maturity profile of debt with the relatively long-term nature of its investments. The exercise will also allow the company to focus on and strengthen its core operations, the firm informed the BSE.
Prakash said, “With the proposed asset liability mismatch correction in both our key businesses, we hope to find a sustainable capital structure to finance our businesses over medium and long term.”
“We remain cautiously optimistic in the near term, considering liquidity constraints and a volatile market environment, despite strong business fundamentals and unprecedented market opportunity,” he said.
By leveraging its IP smart learning solutions and a customer reach of 34,500 schools and 23 million learners, Educomp is confident of returning the business to a position of strength over the medium term, the release said.
(Edited by Joby Puthuparampil Johnson)