Educomp Solutions today said it has tied up USD 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.
Cheering the move,the company’s share price soared by over 11 per cent to touch a high of Rs 152.70 at the BSE.
Educomp,the country’s leading education services firm,said its board has approved a comprehensive financing package of USD 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.
Out of the total USD 155 million,Educomp will utilise about USD 111 million to pay off its existing FCCBs (foreign currency convertible borrowings) — USD 78.5 million towards principal repayment and the balance as redemption premium.
The remaining amount of about USD 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.
The financial package includes USD 70 million under External Commercial Borrowings (ECBs) — USD 30 million from IFC and USD 40 million from French development finance institution Proparco (Societe De Promotion Et De Participation Pour La Cooperation Economique) — under an 8.5 year facility.
Besides,it will get USD 10 million via FCCB from IFC,convertible into equity shares at a 40 per cent premium to the floor price. The package also includes an amount of up to USD 50 million through preferential allotment of equity shares to IFC,Proparco and Mount Kellett at a price of Rs 149.16 a share,a 10 per cent premium to the floor price.
Educomp will also issue equity shares and warrants on a preferential basis to its promoters for an aggregate amount of up to USD 55 million (15 million in equity and USD 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 16,20112 to obtain their requisite approvals.
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