Intueri to exit Australia on March 29, confirms bank standstill, fails to get audit

Friday 24th March 2017

Intueri Education Group, the ailing private training provider, says it will exit the Australian market on March 29, having failed to convince education authorities to re-register its colleges across the Tasman or renew funding.

The company had hoped to be allowed to run the Australian institutions until the end of the year but the Australian Skills Quality Authority will cancel the registration of Intueri's Conwal & Associates and Online Courses Australia (OCA) colleges from March 29.

Separately, Intueri confirmed it has reached a standstill agreement over some $70.7 million of bank debt with ANZ Bank New Zealand. On Feb. 14, the company advised ANZ Bank it was in breach of lending covenants as at Dec. 31, giving it 30 days to negotiate the continuation of the facility. The "Going Concern" section of its annual report shows a $5.1 million deferred payment due on June 30 to the former owners of OCA, acquired in March 2014 as part of its failed Australian expansion.

The company said it was very disappointed with the outcome in Australia, given that Intueri had a managed exit strategy in place which it believed would have been in the best interests of students and staff. It is working with agencies to "assist in the transfer of students to alternative providers, and providing support to staff."

The early closure of the Australian colleges had driven up costs associated with those businesses and as a result, Intueri revised up its full-year loss to $24.3 million from $23.3 million. Despite the uncertainties facing the company, it reaffirmed its decision to present its 2016 financial statements on a going concern basis.

However, in releasing its annual report today, the company said its auditor, PricewaterhouseCoopers, "has not been able to form an opinion on these financial statements due to the significant uncertainties and insufficient audit evidence to satisfy, within their materiality limits, the carrying value of non-current assets in the statement of financial position, and whether the application of the going concern assumption is appropriate."

Intueri hired High St Capital Partners to drum up interest in the private training establishment company, as a sale proposition either as a whole or in parts. Today it reiterated that its board "is assessing a number of capital restructuring and strategic options for the group, including a potential divestment of businesses." The standstill agreement with ANZ is to remain in place pending the outcome of the review, it said.

It said there was "no certainty that a bid will materialise or an acquisition be completed as a result of the current strategic review, and Intueri recommends that persons considering trading in Intueri shares seek professional advice prior to doing so," repeating an earlier warning.

The company also said it has received the draft Deloitte report from the Tertiary Education Commission's investigation into Quantum. Intueri said it was currently reviewing the report and will provide a response by April 20, as requested.

Quantum was acquired partly via funding from its $60 million IPO in 2014 but has been wound down, with some courses transferred to its other colleges. The Serious Fraud Office is also looking into Quantum.

The shares last traded at 1.4 cents, valuing the company at $1.4 million. It went public in 2014, a busy year for initial public offerings, raising $60 million at $2.35 a share and valuing Intueri at $235 million.

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