Vocation (VET), the struggling education services company, has sold its Endeavour College of Natural Health for up to $75 million to cut debt and try and survive.
Vocation will get $65 million cash (subject to working capital changes) and up to $10 million in “contingent deferred consideration.”
The buyer is the UK-based global company, Study Group which was one of the underbidders to Vocation when it bought Endeavour last year.
The news saw a small rise in the Vocation share price yesterday to 8.4 cents. It was $3.40 in September of last year.
That indicates a certain scepticism about Vocation’s future viability.
Vocation is still working on a strategic review of its business and the looking at options for its capital structure to create a slimmed-down organisation.
Vocation will pay down almost all of its bank debt through the Endeavour sale, reducing debt from around $85 million to around $10 million.
Vocation’s three remaining largest businesses, Real Institute, AVANA and Customer Service Institute of Australia, will form the core of the slimmed-down company.
Vocation chairman Doug Halley says Vocation will announce its capital and corporate structure in the coming weeks along with a revision of profit forecasts to reflect the smaller version of Vocation after these asset sales.
On Tuesday, Vocation sold the Perth-based Australian School of Management and the Australian College of Applied Education for a combined $15 million, above the $4 million it paid for the two businesses last year.
