Burdened with huge losses in the third quarter, Chennai-based education services company Everonn Education on Wednesday called off its decision to acquire Centum Learning from Bharti Group.
Everonn in August last had signed a term sheet agreement with Centum to buyout all of the issued and paid up share capital of the Bharti company. In return, the Bharti Family Office was to receive a combination of cash and equity shares in Everonn. The Bharti Family Office manages investments made by the promoters of the Bharti Group in their personal capacity. Both the parties had refused to divulge financial details of the deal at that point of time.
In a regulatory filing, Everonn on Wednesday said both parties have mutually agreed not to extend the validity of the term sheet and, accordingly, the term sheet stands cancelled. The term sheet was suppose to get terminated on expiry of 120 days from the date of term sheet unless it was extended by mutually written agreement of both the parties.
Centum has a presence in 20 countries across Africa and South Asia with experience in the training and skill development domain across 21 industry verticals. The coming together of two players was aimed at creating an organisation with a portfolio spanning education, corporate training and skill development. In addition, Everonn was hoping to get into the key emerging economies across South Asia and Africa.
Everonn, touted to be the largest VSAT education network in the world, has plunged into red with its losses mounting to R129.37 crore for the third quarter from R6.54 crore loss it incurred in the same quarter previous fiscal. The total income of the company for the quarter slipped to R15.63 crore against R88.27 crore.
Plagued by unrecovered dues and advances, as well as dead investments in subsidiaries, the company is mulling recasting of its business model. The companyís plea for approval for business restructuring is pending before Madras High Court. According to sources, once the approval is obtained the company will seek shareholders nod for the same.
Significantly, the total expenses of the company shot up to R139.17 crore from R82.63 crore. The tax expenses of the company also increased to R15.85 crore from R3.84 crore. Everonn has a slew of tax assessment cases pending before competent authorities.
In a note to the stock exchanges, the company said that it was in the process of reviewing the investments in view of decline in the value of investments in subsidiaries and others whose networth have eroded.
The company has also hinted at the probable loss it may incur from non recovery of loans and advances and also due to delay in collections from government and other agencies.
It had provided an interim provision of R96.25 crore for the quarter ended December. ď The management is trying its best to recover the dues and advances . Further provision will be made at the end of the year,Ē the note said. Everonn has 15 subsidiaries, out of which 12 are wholly-owned and has one indirect outfit. Besides, it holds 51% and 50% in yet another two subsidiaries.
The company has also received notices from certain parties alleging defaults and payment due to them by the company and the management is in discussion with the legal team.