Morning:
9°c
ABC Learning adds £40million
Bill Condie10 Jun 2008
Crisis-hit ABC Learning Centres, owner of the Busy Bees group, Britain's largest childcare provider, has raised A$82.2 million (£39.6 million) selling new shares to Morgan Stanley and Lazard Asset Management.
The sale is equivalent to 15% of ABC's issued capital, with Morgan Stanley taking 12.9% and Lazard acquiring 2.1%.
ABC's shares have dropped 76% this year after a slump in earnings raised concerns about its ability to repay debt.
The company sold a 60% stake in its US operations to Morgan Stanley in April and expects to exit its voucher operation in Britain, under which it administers childcare rebates, soon.
ABC pursued a debt-funded acquisitions spree around the world but hit the rocks after the cost of credit surged.
Founder and chief executive Eddy Groves had to sell almost all his stake in the company as the shares tanked, triggering margin calls on loans he had taken with his shares as security.
ABC's Busy Bees also owns the Leapfrog nursery brand.
