Renaissance reveals changes to ACG education business deal
Following a conditional agreement with Academic Colleges Group (ACG) to sell the assets and business undertaking of its Yoobee School of Design subsidiary, Renaissance has now revealed adjustments to the deal.
Instead, the embattled company, along with ACG, have adjusted their agreement so that the transaction will be executed by way of a sale of shares rather than a sale of assets.
Originally announced on 31 October 2013, the transaction was subject to a number of customary conditions, including regulatory consents from the Tertiary Education Commission and New Zealand Qualifications Authority.
In a statement released by the Board of Renaissance Chairman Colin Giffney, both parties wanted those conditions to be satisfied, and the transaction to be completed, as soon as possible.
"To that end, and as a result of discussions between Renaissance and ACG, we were both of the view that the regulatory consents will be received more quickly if the transaction proceeded by way of a sale of shares as opposed to assets," Giffney states.
Despite the change in agreement, Giffney insists the net economic effect of the transaction is identical to that which would have occurred as a result of a sale of the assets.
The agreement also remains conditional upon a number of customary conditions, including regulatory consents from the Tertiary Education Commission and New Zealand Qualifications Authority, the retention of certain employees, consent of third parties to the effective assignment of certain key contracts, Academic Colleges Group obtaining a warranty insurance policy and the approval of Renaissance Corporation Limited shareholders.
It is also now conditional upon the Inland Revenue Department consenting to Yoobee School of Design being removed from Renaissance's consolidated tax group, according to Giffney's statement.
The last date for satisfaction of the conditions (other than regulatory consents and retention of certain employees) is 31 January 2014 and (for regulatory consents and retention of certain employees) 31 March 2014, with completion of the transaction to occur shortly thereafter.
Giffney claims it is now expected that the Renaissance shareholder meeting to approve the transaction will be held in January 2014. Prior to the meeting, the board will commission an appraisal report for the transaction.
The board is also expected to issue a full statement to shareholders in its notice of meeting - outlining the future direction of Renaissance, the expected financial position of Renaissance after completion of the transaction and the planned application of the sale proceeds.