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March 3, 2008 |
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ABC LEARNING: Major Investors Buy Shares to Save Company ABC Learning Centres Ltd.'s biggest investors are buying company shares to offset the free fall of the stocks, various reports say. As reported in the Troubled Company Reporter - Asia Pacific, the company's Sydney trading on Feb. 26 plunged 43% after a slump in earnings raised concerns it may struggle to repay debts. The drop to AU$2.14 triggered margin calls on stakes held by some directors. Consequently, stock trading was halted as the company entered talks on "indications of interest" for parts of its business, the report added. More than 96% of the remaining 21.9 million ABC Learning shares owned by directors, equivalent to 4.6% of stock outstanding, are held in margin lending arrangements that may result in forced sales, the TCR-AP says. According to Richard Pullin at Reuters, Singapore state investment firm Temasek Holdings, has increased its stake in the company by buying nearly 12 million extra shares, paying between AU$2.14 and AU$4.20 a share. Temasek's purchase included a parcel of 8 million shares on Tuesday at AU$2.14 a share. Myrna Thomas, Temasek managing director for corporate affairs, said that they remain committed to their investment in the company, and their investment decisions based on commercial considerations, The Walls Street Journal relates. According to the Journal, U.S.-based Lazard Asset Management also raised its stake to 13.93% from 12.2%. Temasek and Lazard made their purchases on the open market. An industry insider told the Journal that a private equity is behind an approach for ABC's U.S. operations. Goldman Sachs JBWere and Austock are serving as advisers. There is speculation that several private-equity firms could be contenders, including Bain Capital Partners. TPG Inc., Macquarie Group Ltd. -- which has child-care interests -- and Pacific Equity Partners have also been tipped as possible buyers, the Journal adds. About A.B.C. Learning A.B.C. Learning Centres Limited provides childcare services and education. The company operates in Australia, New Zealand, the United States and the United Kingdom. The company's subsidiaries include A.B.C. Developmental Learning Centres Pty Ltd, A.B.C. Early Childhood Training College Pty Ltd, Premier Early Learning Centres Pty Ltd, A.B.C. Developmental Learning Centres (NZ) Ltd., A.B.C. New Ideas Pty. Ltd., A.B.C. Land Holdings (NZ) Limited and Child Care Centres Australia Ltd. On September 25, 2006, the company acquired Hutchison Child Care Services Ltd. On September 7, 2006, it acquired The Children's Courtyard LLP. On December 18, 2006, it acquired Busy Bees Group Ltd. On January 26, 2007, it acquired La Petite Holdings Inc. On February 2, 2007, it acquired Forward Steps Holdings Ltd. On March 23, 2007, it acquired Children's Gardens LLP. In September 2007, the company purchased the Nursery division (Leapfrog Nurseries) from Nord Anglia Education PLC. As reported by the Troubled Company Reporter - Asia Pacific on February 29, 2008, the company's Sydney trading last Feb. 26, plunged 43% after a slump in earnings raised concerns it may struggle to repay debt. The drop to AU$2.14 triggered margin calls on stakes held by some directors. Consequently, stock trading was halted as the company entered talks on "indications of interest" for parts of its business. More than 96% of the remaining 21.9 million ABC Learning shares owned by directors, equivalent to 4.6% of stock outstanding, are held in margin lending arrangements that may result in forced sales. |
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