Bankers clear proposal for sale of Educomp to Ebix

Bankers clear proposal for sale of Educomp to Ebix

New Delhi, Apr 25: A 27-member Committee of Creditors (COC) consisting of 24 Educomp Solutions Limited (ESL) banks and lenders and three lenders of its subsidiary Edu Smart Services Private Limited (ESSPL) has recently cleared a proposal for the sale of ESL to Nasdaq-listed Ebix Inc., a leader in insurance and payment processing software and exchanges.
Ebix Inc. has reportedly earmarked $300 million for investments in India, including acquiring companies in the digital learning and remittance space, and after various discussions by COC members on resolution plans and evaluation criteria for close to a year, the resolution plan submitted by Ebix Inc. was approved.
A new law on insolvency and resolution process has facilitated this transfer of ownership and operational management.
“The purpose of IBC (Insolvency and Bankruptcy Code) is to revive companies like Educomp, Essar Steel, Binani Cements etc. which have a fundamentally strong model but a stressed balance sheet by bringing in a new management with strong balance sheets. This is the only way to revive these vital sectors of the economy. What is important is that the process has produced a highest bidder which complies with the processes and standards of the IBC, including stringent checks on the connected party issue which were conducted by M/s Kroll,” one of the bankers involved in the resolution process said on condition of anonymity.
He maintained that it has been one of the best run processes so far, with the COC supervising every stage of the resolution process under the watch of the Resolution Professional and process advisors Price WaterHouse Coopers.
A transaction audit was carried out as per existing IBC norms and barring a few technical issues, Educomp’s resolution and operational handover process was found to be satisfactory.
The banker also mentioned that Grant Thornton carried out a forensic audit on the company and did not come up with any adverse findings.
Mahender Khandelwal, Educomp’s insolvency resolution professional, clarified several aspects of the resolution process, including aspects such as conflict of interest.
The CoC has said it has examined all agreements between the two parties.