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 Posté le: Jeu Sep 19, 2013 4:19 am Sujet du message: CIBT sells subsidiary to exit increasingly competi |
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{CIBT sells subsidiary to exit increasingly competitive ESL sector}
Toby Chu, CEO, CIBT Education Group Inc.By Glen KorstromTue Sep 3, 2013 12:36pm PSTCIBT Education Group Inc. announced September 3 that it is exiting the English as a Second Language (ESL) education sector and will focus on its Sprott Shaw College (SSC) division partly because of new competition from the University of British Columbia (UBC).UBC announced earlier this summer that it would be launching UBC Vantage College in September 2014 for first-year international business students.CIBT (TSX:MBA) has signed a definitive agreement to sell its King George International College and King George International Business College divisions (KGIC) to Loyalist Group Ltd. (TSX-V:LOY) for up to $13.5 million.CIBT will get $9.5 million on closing and $4 million based on certain adjustments.In December 2010, CIBT purchased its KGIC subsidiary for $4.5 million. The transaction was initially announced as a $9 million deal but KGIC failed to achieve anticipated success and there were other adjustments in the price, CIBT CEO Toby Chu told Business in Vancouver."Originally the buyer proposed a much lower price," Chu said. "We weren't interested. Then, the price kept going up and more people came in to bid as well."News of the transaction helped CIBT stock shares surge 39%, or $0.09, to $0.32.It is expected to add $0.14 per share to CIBT's value and to help the company post a profit in its fiscal 2013 year, according to Chu.In the year ended August 31, 2012, CIBT posted a loss of $814,000, which was substantially less than the $9.4 million loss the year before.Two other changes that will help CIBT achieve profitability, Chu said.One is a $500,000 saving by voluntarily leaving the AMEX exchange in the U.S. and instead joining the lower-cost and less regulated OTCBB.The other bump to the balance sheet comes from the B.C. government eliminating its harmonized sales tax (HST). Educational organizations paid the HST on rent, audit costs and other professional fees yet were not able to charge the HST on tuition.Chu said CIBT plans to pump the money generated from selling KGIC into SSC.His hope is that the City of Richmond approves rezoning for property between Bridgeport Road and Sea Island Way for a new 15-storey educational centre in which SSC would be an anchor tenant.Chu said CIBT has partnered with a developer to build the project.The centre would also have eight or nine other schools, which would be a mix of public and private."Various campuses would be in one building along with a student long-stay hotel so students can take the elevator to school," Chu said."We've had inquiries from public institutions from out of town that wan to be part of the development. They want a foothold in the Lower Mainland."gkorstrom@biv.com@GlenKorstromTags: education, school, Toby Chu, Richmond, CIBT Education Group Inc.,[url=http://www.longchamp-handbags-outlet.net]longchamp sale[/url], Sprott Shaw Community College,[url=http://www.longchamp-handbags-outlet.net]longchamp le pliage[/url], University of British Columbia, merger or acquisition, Lower Mainland
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