Mumbai-based education service firm MT Educare Ltd (MTEL) has completed the sale and leaseback of its Mangalore Pre-University (PU) Campus for about Rs 55 crore (approximately $8.8 million), according to a stock market disclosure.
The sale and leaseback deal entails continuation of MTEL's operating and management rights in the premises for 30 years with an initial 15-year lock-in period. The company did not disclose the name of the buyer.
“The setting up of Mangalore PU campus has been instrumental in MTEL's expansion in Karnataka, especially in new PU college tie-ups. On this proof of concept set up in Mangalore, MTEL has successfully tied up with 20 colleges to date, of which 14 colleges were operational in financial year 14-15,” MT Educare said in the statement.
The education firm had acquired land parcels aggregating 1.48 acres and constructed Mahesh PU College campus and hostel building at Mangalore in Karnataka in 2011. The campus, which has been operational since February 2013, comprises classrooms and other facilities like a library, an auditorium, a playground and administrative offices.
The sale and leaseback of Mahesh PUC campus is part of the company's efforts to liquidate the asset to move into an asset-light model and to enhance cash reserves.
Founded in 1998, Mumbai-based MT Educare (formerly Mahesh Tutorials Pvt Ltd) offers coaching for Std IX-Std XII students, besides engineering and medical entrance tests, as well as for CA, CPT, CS, CWA and professional CA (IPCC & Final) exams.
The company has over 200 coaching centres spread across 130+ locations, with a faculty strength of over 1,000 and presence in states, including Tamil Nadu, Karnataka, Punjab, Haryana and Gujarat.
It counts BanyanTree Growth Capital and financial services firm Avendus' public markets focused PE fund as shareholders.
MT Educare’s shares were trading at Rs 98.7 a unit, down 6.5 per cent at 3.21 PM on BSE in a flat Mumbai market on Monday.
(Edited by Joby Puthuparampil Johnson)