Educomp Solutions ties up $155 mn to repay FCCBs, stock surges 11 per cent

Educomp Solutions has tied up $155 million (about Rs 852 crore) worth funds to pay off its existing overseas borrowings, as also to fund its capital expenditure and strengthen its balance sheet.

Of the total $155 million, Educomp will utilise about $111 million to pay off its existing FCCBs (foreign currency convertible borrowings) - $78.5 million towards principal repayment and the balance as redemption premium.

The remaining amount of about $44 million will be used towards capex and strengthening the company's balance sheet, Educomp said, while adding that the board decision was subject to approval by the shareholders.

Cheering the move, the company's share price soared over 11 per cent to touch a high of Rs 152.70 at the Bombay Stock Exchange.

Educomp, the country's leading education services firm, said its board has approved a comprehensive financing package of $155 million, which includes funds from World Bank arm IFC, French development finance entity Proparco, private investment firm Mount Kellett and the company's own promoters.



Educomp will also issue equity shares and warrants on a preferential basis to its promoters for an aggregate amount of up to $55 million (15 million in equity and $40 million in warrants) at a price of Rs 193.74 a share, a premium of around 44 per cent to the share closing price on June 18, it said.

The decisions were taken at a meeting of committee of its board of directors, which has also decided to convene an Extraordinary General Meeting (EGM) of the company shareholders on July 16, 2012, to obtain their requisite approvals.

With PTI inputs