Shares in Educomp Solutions were locked up in upper circuit on Tuesday, gaining by their daily limit of 10 per cent, after the country's largest education services firm announced its debt restructuring plans.
Educomp Solutions, which had a debt Rs 1,782 crore as on March 31, 2013, said it has initiated discussions with its lenders and has approached corporate debt restructuring (CDR) forum to restructure its rupee debt to correct the asset liability mismatch on its balance sheet.
Educomp shares have underperformed over the past several quarters on account of huge debt and interest payments. The stock has fallen 9 per cent over the last month and 36 per cent over the last quarter since April 09, 2013.
The company has also approached the CDR forum for restructuring of debt in its K-12 business (second major business, operated through its subsidiary Educomp Infrastructure and School Management).
The debt-restructuring exercise will enable the company to comprehensively address the liquidity issues by matching the maturity profile of debt with the relatively long-term nature of its investments. The restructuring will also allow the company to focus on and strengthen its core operations, Educomp Solutions said in a statement to BSE.
At 11:45 am Educomp shares were trading at a day's high of Rs 37.25, up 9.88 per cent, outperforming the broader Nifty and the Sensex.
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