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Educomp defers $250 mn fund raising, shares down

Educomp defers $250 mn fund raising, shares down
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First Published: Fri, Sep 02 2011. 12 04 PM IST
Updated: Fri, Sep 02 2011. 12 04 PM IST
New Delhi: India’s education services provider Educomp Solutions on Friday said it has deferred a proposal to raise up to $250 million through a share sale due to poor market conditions.
The company had in May announced plans for a share sale but had given no timeframe.
India’s stock market has been volatile this year with the benchmark index falling more than 18%, making it one of the worst performing major markets in the world.
Local concerns including rising interest rates that have started hurting corporate profits and slowing economic expansion have also weighed on stocks.
Shares in Educomp, valued at Rs1,950 crore, have lost about 62% this year. At 11.53 am on Friday, they were trading down 3% at Rs198.
A weak outlook for the current fiscal year and a search by the income-tax department at Educomp’s office last month have battered the stock lately.
The company will be “comfortably” able to meet future obligations due in July 2012 through internal accruals and debt. Foreign currency convertible bonds worth $78.5 million would be due for redemption in July, chief financial officer Sangeeta Gulati told Reuters.
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First Published: Fri, Sep 02 2011. 12 04 PM IST