Everonn Education shifts focus to kindergarten education1 min read . Updated: 26 Sep 2013, 06:04 PM IST
As part of its recovery process the firm will reduce its dependence on government-funded programmes
Chennai: Troubled Everonn Education Ltd as part of its recovery process will reduce its dependence on government-funded programmes and focus on the schools and kindergarten education business where its investor Gems Education has specialization, newly appointed managing director A. Srinivasan said.
Everonn has a tough road ahead with a huge debt to restructure and a need for improved corporate governance.
The education company’s corporate governance practice came under scrutiny after co-founder P. Kishore was arrested by the Central Bureau of Investigation on charges of bribery and tax evasion two years ago.
Following this, Everonn faced a churn in top management despite Dubai-based investor Varkey Group (Gems Education) picking up a controlling stake in it. The firm reported a loss of ₹ 255 crore for the year ended 31 March, much wider than the ₹ 16.5 crore loss it made in the previous year. Its share price has nose-dived, shedding 93% between August 2011 and September 2013, while the Sensex gained 19.5% in the same period.
At Everonn’s annual general meeting on Thursday, Srinivasan, appointed by the board of directors in April, outlined the company’s plan for recovery. “We are getting our acts together, be it business or corporate governance," Srinivasan told Mint on the sidelines of the meet.
“Our biggest challenge is debt restructuring of ₹ 460 crore, which is in its final stages. When it comes through we will not only reduce the interest outgo but it will also free up cash flow for business," he said.
The company has identified past mistakes on corporate governance and its over dependence on government business as key issues.
Everonn was an intermediary to third parties that provided computer hardware for schools under government-funded programmes, but the government delayed payments and the hardware companies stopped maintaining their service, R. Natarajan, newly appointed independent director, said explaining what led to Everonn’s woes.
Natarajan is the managing director and chief financial officer of Helion Advisors, a private equity company.
Everonn’s shares fell 1% to ₹ 29.60 on Thursday on BSE, while the Sensex gained 0.19% to 19,893.85 points.