Funding to Acquire School Infrastructure of an education technology firm under Liquidation

Business Description

Project Overview:
The company develops and owns school infrastructure and leases out the same to educational trusts/societies. The company acquires land and constructs entire physical infrastructure / building required for a school and leases these school assets to ‘Educational Trust’ for a minimum 30 years period and the Trusts are in turn responsible for running the schools, which pay lease rentals to the company. As of date, the company holds the assets with Fair Value of US$ 139.45 Mn. Company availed term loans from various banks which turned NPA and lenders filed application for liquidation.

Borrower Overview: The group owns 5 Companies of which 3 are in to manufacturing of automotive parts and other components and 2 are operating in the education sector. The group has a collective net worth of more than US$ 70 Mn & contribute annual turnover of US$ 28 Mn. Being renowned industrialists and having reasonable experience in take over and reviving schools they bid for the company owning school infrastructure of multiple schools, which are given on lease to various Trusts/ Societies who are running the schools

Reason for Selling

The company is a school assets and real estate holding subsidiary of listed education technology firm, whose accounts turned NPA and lenders filed application for liquidation.

The group bid for US$ 70.14, 100% voting by CoC has taken place in favor of the group’s promoter, and the group now seeks to raise structured investment of US$ 49 Mn, to settle the admitted claims of financial creditors and operational creditors and to improve infrastructure of these schools.

Key Financials

  • Revenue Target: EUR0.00
  • Deal Structure: OTHER

Additional Information

The company is projected to generate about US$ 8.40 Mn of revenues FY21 onwards, with an EBITDA of about 98.5%, with a PAT of about 35%, considering the payment of interest for the term loan raised through this funding round.

The group is looking to raise debt funding for the same, and would be open to diluting a minority stake in the company

Gautam Khurana

Founder & Managing Partner
India Law Offices LLP