Intueri Education Group has been placed into voluntary administration after a strategic review garnered an offer for its operating assets that is less than the value of its debt.
The company said the move only affects the parent company and non-operating subsidiaries and that its three private training establishments "continue to trade as normal".
BusinessDesk understands ACG Education, which is controlled by Australian buyout firm Pacific Equity Partners, has made an offer for the three New Zealand colleges.
Intueri said it has received an offer for those businesses but it is below the $70.7 million in debt with ANZ Bank New Zealand, meaning the bank would be forced to take a loss. The company operates with the approval of ANZ after breaching a lending covenant and has further calls on its funds coming due. The shares last traded at 1.1 cents, valuing the company at $1.1m, but were suspended this morning.
ACG operates 35 campuses in 10 cities in New Zealand, Vietnam and Indonesia. Chief executive John Williamson, appointed last year, was formerly head of Hellaby Holdings. ACG didn't return calls yesterday while Intueri's interim chief executive said yesterday that the company's strategic review was still ongoing.
Shareholders who participated in Intueri's 2014 initial public offering at $2.35 a share have been all but wiped out. The company's recent statements had warned investors to be wary of trading the stock, given its difficulties.
Intueri said today it has a confirmed bid for its three New Zealand PTEs - Intueri Education New Zealand, NSIA and the New Zealand Institute of Sport, which includes the New Zealand College of Massage.
"The offer price is below the amount of Intueri's debt," chairman Chris Kelly said in a statement. "If the sale proceeds, Intueri will have insufficient residual assets with which to operate a sustainable business, clear remaining debt or to make any return to shareholders. The borrower of Intueri's bank debt is the listed parent company of the group and, if sold by the voluntary administrator, the New Zealand businesses will be released from their guarantees of the parent company debt.
The board appointed William Black and Conor McElhinney of McGrathNicol as voluntary administrators.
"This is a very disappointing and difficult decision as the New Zealand colleges are performing well," Kelly said. "However, the overall impact of the Australian regulatory changes forcing Intueri's exit from Australia in 2017, and the earlier wind down of Quantum Education Group, materially changed the scale and revenue generation of the company and its ability to service and repay debt."
Intueri's 2014 IPO allowed vendor Arowana International to net about $102m while selling its stake down to 24.9 per cent and provided $60m to pay for the acquisition of its now-defunct Quantum Education Group.