Vocation goes into voluntary administration


Vocation goes into voluntary administration

(Picture: Vocation chief Stewart Cummins)

26 Nov, 2015
Source: The Australian Business Review
Author: Kyla Loussikian

Troubled education provider Vocation has entered voluntary administration, announcing “with great regret” the board has been unable to secure funding to keep it alive.

The company said today that contrary to earlier indications, “it is now clear that current and potential investors are not willing to inject additional funds”.

Vocation on Monday asked the Australian Securities Exchange for an extension of its ­voluntary suspension from trade, in place since mid-November.

Vocation (VET) had been hoping to raise capital from institutional and sophisticated investors as it tried to repair its balance sheet.

Instead, Ferrier Hodgson has been appointed to act as voluntary administrator.

The firm said it intends to “explore all options” to allow its entities to continue operations.

DataRoom revealed last week market concerns that the salvage plan had collapsed.

The company negotiated an amended loan facility with its ­financiers in July, which committed it to a minimum $3 million in ­repayments over the year from a cash balance of about $9m.

Vocation, which at that time had gross debts of $11m, is required to make a $1m payment by the start of December. It is unclear whether it will be able to do this without additional capital.

Vocation this year logged a statutory net loss of $300.3 million for the 12 months ended June 30 compared with a loss of $3.5m a year earlier.

The company has reduced debts sharply this year, after a damning Victorian government review stripped funding from two subsidiaries and forced their closure, leading to a share price collapse.

Vocation’s stock plunged 57 per cent in one day last October when the company, which had repeatedly denied media reports of trouble in its Victorian business, finally admitted it had lost $19.6 million in government funding.

The Victorian review and subsequent share collapse led to the filing of three separate class actions against the company, all alleging misrepresentations and breaches of the continuous disclosure regime.

In a statement, the company said its turnaround strategy had been “proceeding well” with “solid increases in student enrolments (and) greater discipline in training operations”.

Vocation shares hit a high in September last year of $3.35 and yesterday closed at 12c.

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Vocation imploded last year after a damning government audit stripped it of funds. The tin can could have been ­rattled longer — for another six months by some estimates. But in the end it wasn’t just a lack of capital that ended the Icarian life of Vocation, one of Australia’s first listed private training providers; there was also fatigue.