New Delhi [India], April 2 (ANI): Pioneering digital education company Educomp Solutions, which had filed for insolvency in May 2017, is reportedly now well on its way to revival with the help of the new Insolvency and Bankruptcy Code (IBC).
Educomp Solutions provides learning solutions to schools, governments, teachers, students and parents. The solution is based on education principles that help them to design education systems.
It may be recalled that Educomp had to declare bankruptcy after it failed to collect dues from schools in B tier and C tier cities in 2016.
According to a report published by the indian-commodity.com web site, the company submitted a restructuring proposal to a consortium of bankers led by State Bank of India.
The bankers appointed PricewaterhouseCoopers (PWC) to conduct a detailed techno-economic viability study (TEV study) of the company. The subsequent PwC report, which was submitted in September 2016, suggested balance sheet course correction to make the business viable again.
According to the web site, Educomp Solutions' filed its application under the 2016 Insolvency and Bankruptcy code (IBC) and this was admitted for processing by the National Companies Law Tribunal (NCLT), on May 30, 2017.
Post admission of the NCLT petition, Mahender Khandelwal was appointed as a Resolution Professional (RP) by the Committee of Creditors (CoC) to take over the management last September.
PwC was appointed as the process advisor and BDO was asked to do the transaction audit of the company.
The Expression of Interest floated by the RP found 14 companies showing interest and two successful bids.
The CoC finally chose Ebix Inc., a NASDAQ listed company, as the successful bidder.
The latter has reportedly agreed to invest Rs. 400 crores to revive Educomp Solutions.
This includes a one-time upfront payment to the lenders of Rs. 325 crores and Rs.75 crores as investment in the company to grow the business.
Further the proposal envisages that all employees will be retained.
This will be the second big investment in education in the past year following the successful funding of BYJU's, another online education company.
The private education sector is likely to receive a big boost in the coming years. (ANI)