Intueri extends banking facility to finalise acquisitions of OCA, NZ Institute of Sport

Wednesday 23rd March 2016

Intueri Education Group, whose Quantum Education Group unit is under investigation by the Serious Fraud Office, has extended its bank facility to $80 million as it makes the final payments for two acquisitions.

New Zealand's largest private training provider has extended its banking facility with an additional $20 million debt facility, taking the total facility to $80 million. The credit line will now last two years rather than three, meaning it will be renegotiated in March 2018. Intueri had $53.4 million in bank debt as of Dec. 31, 2015.

The $20 million increase will help cover a payment of A$19.9 million for the final 50 percent of Online Courses Australia Group (OCA), and the $19.3 million purchase of the New Zealand Institute of Sport, including its subsidiary New Zealand College of Massage.

Intueri will pay A$15 million for OCA by March, and a further A$4.9 million by June 2017, with an interest rate of 6.95 percent on the deferred charge. It had agreed to pay A$15 million for the final 50 percent of OCA, but that was increased due to the performance of the business in 2015. In the nine months to Dec. 31, 2015, OCA posted net profit of $7.2 million on revenue of $27.7 million.

The education provider posted a $48.5 million annual loss for 2015, after writing down the value of Quantum by $53.1 million, including wiping $27 million off the value of its the school's brand and goodwill to take it down to zero. It said it has a supportive relationship with its bankers and is focused on reducing debt over the next two years.

The shares recently traded at 48 cents, and have dropped 26 percent so far this year, having sunk 32 percent to 36.5 cents on Jan. 29 after it told the NZX that Quantum Education Group was under investigation by the SFO.

The stock plunged 74 percent in 2015, most of which occurred after its November announcement that the Tertiary Education Commission was reviewing funding at two of its schools. The shares were sold at $2.35 apiece in its 2014 IPO.

BusinessDesk.co.nz

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