Educomp extends gain; stock up 10% on debt restructuring plans

Extending a sharp rally for the second straight session, shares of Educomp Solutions today jumped nearly 10 per cent, after the company initiated discussions with its lenders and approached corporate debt restructuring forum to rejig its rupee debt.

After making a bullish opening, shares of the company further climbed 9.93 per cent to Rs 40.95 -- its upper circuit limit at the BSE. On the NSE, the stock zoomed up by 9.91 per cent to touch its highest trading permissible limit for the day at Rs 41.

In a filing to the BSE Educomp Solutions had said, it has initiated discussions with its lenders and has approached corporate debt restructuring (CDR) forum to restructure its rupee debt to correct the asset liability mismatch on its balance sheet.

The company has also approached the CDR forum for restructuring of debt in its K-12 business (second major business, operated through its subsidiary - Educomp Infrastructure and School Management).

The debt-restructuring exercise will enable the company to comprehensively address the liquidity issues by matching the maturity profile of debt with the relatively long-term nature of its investments.

The restructuring will also allow the company to focus on and strengthen its core operations, Educomp Solutions said.