Shares of Everonn Education Ltd fell as much as 9% in early trade on Thursday after the company’s long-term and short-term loans were downgraded by CARE Ratings.

The stock fell 6.35% to close at 55.35 on BSE. The exchange’s benchmark Sensex gained 0.69% to close at 18,542.20 points.

Loans of the Chennai-based company amounting to 808 crore were downgraded to D from BB-, said CARE.

The ratings were revised because of delays in debt servicing due to a significant deterioration in the liquidity position of the company on account of delay in the realization of receivables, CARE Ratings said in a statement.

Average receivables were at 348 days in March 2012 compared with 181 days in March 2011. During the nine months ended December 2012, Everonn experienced significant delays in realization of receivables. This coupled with significant losses on account of poor operating performance led to delays in debt servicing, the press release said.

Everonn, in which the Dubai-based Varkey Group Ltd has a controlling stake, is engaged in the development and sale of educational products (mainly digitized content) and services for both schools and colleges.

Two months ago, Everonn had to terminate its plan to buy Centum Learning, a privately held company of the Bharti group. Everonn had said it will acquire Centum Learning in August.

Everonn Education reported a loss of 186 crore on a total income of 101 crore in the nine month ended 31 December. It reported a loss of 17 crore in 2011-12.

Co-founder P. Kishore had stepped down from the board and resigned as managing director from the company in February 2012. The board decided to declassify him and his family members as promoters in March, seven months after Kishore was arrested on charges of bribery and tax evasion in August 2011.

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