Raffles Education Corp

[Musicwhiz]

Business Times - 24 May 2011

Raffles Education goes to Mideast

JV will provide professional training and consultancy

By TEO SI JIA

RAFFLES Education Corp has entered into a joint venture to pursue opportunities in the Middle East.

The education provider, through new subsidiary Raffles Education Middle East Private Limited, has entered into a shareholders' agreement with Al Rushaid Petroleum Investment Company. The joint-venture company, Raffles Education Middle East Group (REMEG), will provide education services, professional training and education-related consultancy services in the Middle East.

REMEG will be incorporated under Saudi Arabian laws with a stated share capital of two million Saudi riyals (S$665,883), with Raffles Education Middle East Private Limited contributing half of it.

'The Middle East is a market filled with opportunities and brings a new dimension to the Group's platform as it extends its footprint from Asia-Pacific to the Middle East,' said Chew Hua Seng, chairman and CEO of Raffles Education.

Under the agreement, REMEG will be operating in certain countries in the Middle East, and will establish and run different levels of institutions, from kindergartens to universities.

It also intends to explore the feasibility of operating a vocational training centre for hospitality and tourism management for the Saudi government, in addition to the setting up of colleges to offer diplomas and advanced diplomas in design and business in Jeddah and Riyadh colleges.

(Not Vested)

[whatzup]

Anyone has update on Raffles Edu?
What is your view to invest in this company?

[dydx]

Today's (16Mar12) announcement shows that our MOE equivalent in Vietnam is not very kind towards Raffles Education.....
http://info.sgx.com/webcoranncatth.nsf/V...3004BCDCE/$file/REC-Announcement-UpdateOnVietnamOps-16Mar2012.pdf?openelement

Do fellow forumers think Raffles Education is a good educator? Any personal experiences to share?

[dydx]

FY12 (ended 30Jun12) full-year result just out.....
http://info.sgx.com/webcoranncatth.nsf/V...4002C5347/$file/RECAnncemtFY2012results.pdf?openelement
What a mess! And just based on the huge $215.5m total borrowings balance and the even larger $314.1m total trade & other payables balance, many would wonder whether this is an education business at all - what a joke!

And when we compare the share price evolution vs. STI.....
http://finance.yahoo.com/q/bc?s=NR7.SI&t...l&c=%5Esti
, Raffles Education has been a loser for some 4 years now!

[dydx]

Raffles Education is asking shareholders for new capital by way of a proposed 1-for-5 rights issue priced at $0.14 per new rights share, with a view to raise $23.93m in gross proceeds.....
http://info.sgx.com/webcoranncatth.nsf/V...70035CC3F/$file/RECRightsIssue270812.pdf?openelement

The amount being raised is quite small relative to what the company is owing the banks and trade creditors totalling in excess of $500m as at 30Jun12; it may not help much if the banks and creditors put RE to a squeeze. If the amount is not enough, RE may have no choice but to go to the shareholders again - just like the students who failed in their first exam and have to take "re"!

[Musicwhiz]

It's not a good business to invest in to begin with. This rights issue, priced at a deep discount to market, is only good if existing shareholders feel that the business is growing and doing well and that funds are in need for expansion.

But if the funds are used to pay down debt or for normal working capital (where OCF is insufficient), then it becomes an issue.

I don't view this corporate development positively.

(Not Vested)

[yeokiwi]

It's not a good business to invest in to begin with. This rights issue, priced at a deep discount to market, is only good if existing shareholders feel that the business is growing and doing well and that funds are in need for expansion.

But if the funds are used to pay down debt or for normal working capital (where OCF is insufficient), then it becomes an issue.

I don't view this corporate development positively.

(Not Vested)

The rise of raffles education from 2002 to 2007 was really spectacular. The adjusted price of raffles education is 6cts in 2002 and it was selling at $5 in Oct 2007.
That was a 80 baggers in 6 years.

I always felt sayang because I had missed the train.
But, despite the high growth, the high PE had always deterred me from taking a stake in RE.

It is quite a coincidence that Midas holdings, setup by the other Chew's brother, showed the same resemblance in the up and down of the share price since 2004.

难兄难弟。

[Musicwhiz]

Hi Yeokiwi,

Completely agree with you on REC's growth being phenomenal - in the past haha. This gets to show that history is not always a good indication of the future, and investors who were looking at yesterday's growth may have been lured in to pay an overly high valuation for future growth which never materialized.....

[pianist]

Raffles Edu announced cancel dividend already announced

wah..how happened to the board oversight/leadership?

[dydx]

In 2010, Raffles Education managed to court Khazanah Nasional - the equivalent of Temasek in Malaysia - into taking a 10% stake in subsidiary Oriental University City Ltd (OUC), but per this evening's (2Sep13) announcement this mismatched business relationship is going to break up, and for Raffles Education that means going back to square one.....
http://infopub.sgx.com/FileOpen/REC-Anno...eID=254941
Worst of all, Raffles Education now has to come out with a total of RMB400.0m (including a RMB100.0m "break fee") in cash to buy back the stake!