IFC, Proparco, Mount Kellet invest in Educomp

A total of $70 million was received under external commercial borrowings (ECBs), comprising $30 million from IFC and $40 million from Proparco. IFC, the World Bank's investment arm, will also provide $10 million via foreign currency convertible bonds (FCCBs), convertible into equity shares at a 40% premium to the floor price, Educomp said in a regulatory filing.

According to the agreement, IFC, Proparco and Mount Kellett will receive up to $50 million through an allotment of preferred shares priced at INR149.16 apiece, a 10% premium to the floor price.

In addition, the education company will issue equity shares and warrants on a preferential basis to its promoters for an aggregate amount of up to $55 million, of which $15 million will be in equity and $40 million in warrants. The price is INR193.74 per share, a premium of around 44% to the June 18 closing price.

Of the $155 million package, around $111 million will be used to pay off  Educomp's existing FCCBs, with the remainder going towards capital expenditure and strengthening the company's balance sheet.

The transaction is still subject to approvals from shareholders. Following the news, the company's share price jumped by over 11.2% to close at INR152.40 on June 20.

Founded in 1994, Educomp has 27 offices worldwide, including 20 in India, three in the US, two in Singapore and one each in Canada and Sri Lanka. It serves more than 5.3 million students in over 10,000 private schools as well as 6 million students in 11,000 state schools.

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• Topics
• South Asia
• PIPEs
• India
• IFC
• Mount Kellet Capital
• Education
• PIPE