The stock of Everonn Education plunged close to 10 per cent in the last two trading sessions after CARE downgraded ratings assigned to its facilities.

The stock closed at Rs 53.50, down 3.35 per cent on Friday. It touched 52-week low of Rs 51 on Thursday, immediately after the downgrade.

The stock had registered its 52-week high at Rs 266.40 on April 13, 2012.

The company's bank facilities ratings were downgraded to ‘default’ after Everonn failed to service its debt on time.

“The revision in the ratings factors in instances of delays in debt servicing of its bank obligations by Everonn Education consequent to significant deterioration in the liquidity position of the company on account of delay in the realisation of receivables,” said CARE rating

All the three bank loan facilities (long-term, short-term and long/short-term) amounting Rs 808.29 crore were downgraded to ‘D’. Instruments with ‘D’ ratings are in default or are expected to be in default soon.

“Average receivables days of Everonn are generally high and were at 348 as on March 2012 against 181 days as on March 2011,” CARE said.

Poor performance

During the nine months ended December 2012, Everonn experienced significant delays in realisation of receivables. “This, coupled with significant losses on account of poor operating performance, lead to delays in debt servicing,” CARE further added.

During FY12, Everonn registered a net loss of Rs 17 crore on a total operating income of Rs 304 crore. During the first nine months of FY13, the company incurred a loss of 186 crore on a total income of Rs 101 crore.

Dubai-based Varkey Group Ltd has acquired stake in Everonn through a combination of preferential allotment, open offer, etcAs on April 17, 2012, the Varkey group had 43 per cent stake.

>badrinarayanan.ks@thehindu.co.in

Related Topics
comment COMMENT NOW