Wednesday, February 15, 2012

Varkey Group ups stake in Everonn Education to 38%

Consolidating its position in Everonn Education, the Dubai-based Varkey Group has increased its stake in the company to 38.12%. The group has also appointed Rakesh Sharma and Dino Varkey as directors on the board. Sharma is chief executive officer of GEMS Education, South Asia, and Varkey is senior director at GEMS.

P Kishore, who hit the headlines last August when the Central Bureau of Investigation arrested him for allegedly bribing income tax officials to the tune of Rs. 50 lakh (Rs. 5 million) for concealing Rs. 60 crore (Rs. 600 million) out of Rs. 116 crore (Rs. 1.16 billion) taxable income, has resigned as managing director.

GEMS Education and Everonn will, over the next few months, hold detailed discussions to build on the strengths of both companies. SKIL Infrastructure with an 18.33% continues as one of the key stakeholders in the company. The Nikhil Gandhi-led SKIL had last year acquired a 20.83% stake in Everonn for Rs. 208.4 crore (Rs. 2.084 billion) to become a co-promoter. Kishore, the founder-managing director, holds a 7.6% share in the company.

Speaking after the Everonn board meeting, Sharma said the GEMS Education investment in Everonn will only have a positive impact on the Indian education sector. "Investing in Everonn will provide us with a critical operating base within India and give added momentum to our strategic expansion plans," he said. “The synergies with Everonn will play a critical role in improving the standards of education provided to the children of India.”

The Varkey Group had acquired close to 12% stake for Rs. 138.23 crore (Rs. 1.382 billion) in Everonn in September. This was followed by an open offer to Everonn shareholders, taking its stake to over 20% at a price of Rs. 528 per share. The group had also picked up close to 3% of Everonn shares from the open market.

According to industry experts, GEMS Education's leading position in the school sector coupled with Everonn's expertise in content creation and technology-enabled delivery of content offer considerable scope for synergy in India. Everonn shares closed at Rs. 296.45 each on Tuesday on the Bombay Stock Exchange, up 1.21% from the previous close.

Source: The Financial Express, February 15, 2012

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