Educomp ties up USD 155m to repay FCCBs; shrs jump 9%

Moneycontrol Bureau

Educomp Solutions on Wednesday said its board of directors have approved a financing package of USD 155 million, which will be partly used to pay off its foreign currency convertible borrowings (FCCBs), sending its stock surging 9%.

Of the total USD 155 million raised, USD 111 million will be used for existing FCCB redemption of USD 78.5 million and balance as redemption premium, while the remaining USD 44 million will be used for capital expenditure and strengthening company's balance sheet, it said.

The company's FCCBs come up for repayment in July. But the conversion was highly unlikely due to the conversion price of Rs 589 a share, according to Brickworks Ratings, sharply higher than the stock's Rs 137.05 closing price on Tuesday.

The stock has been under attack for the last two-and-a-half years from bears who have repeatedly questioned the company's corporate governance standards, accounting practices and business model.

At 10:00 hrs on Wednesday, the stock was trading at Rs 148.65, up 8.5% on NSE.

The approved financial package includes USD 70 million under external commercial borrowings from IFC a member of World Bank Group and French development finance institution Societe De Promotion Et De Participation Pour La Cooperation Economique, under an 8.5 year facility, Educomp said.

It will also get USD 10 million via FCCB from IFC, convertible into equity at a 40% premium to floor price and up to USD 50 million by preferential allotment of shares to IFC, Proparco and Mount Kellett. The preferential allotment will be at Rs 149.16 a share, 10% premium to the floor price.

Educomp will also issue USD 15 million worth of equity and USD 40 million in warrants to its promoter group on a preferential basis. This will be at Rs 193.74 a share, a premium of around 44% to the share closing price on June 18, it said.

Also Read: Educomp funding from banks under strain, says Espirito

Share Price Movement During The Last 12 Months
Period	Price	Latest Price	Gain/Loss (Rs.)	% Gain/Loss
3-Days	133.00	150.40	17.40	13.08
5-Days	135.00	150.40	15.40	11.41
7-Days	133.75	150.40	16.65	12.45
15-Days	132.50	150.40	17.90	13.51
1-Month	155.15	150.40	-4.75	-3.06
3-Month	189.10	150.40	-38.70	-20.47
6-Month	186.35	150.40	-35.95	-19.29
9-Month	232.15	150.40	-81.75	-35.21
1-Year	396.70	150.40	-246.30	-62.09