LONDON (Alliance News) - AEC Education PLC saw its shares plunge Monday as it failed in its bid to get its Singapore license reinstated.
The educations company had its license suspended last August, meaning it isn't able to recruit any foreign students for the college. It had said it was applying for reassessment and was urgently trying to address the regulatory and compliance issues raised by the Singapore regulator. It had stopped enrolling students for the MBA programme whilst English language entry requirements were reassessed.
The head of the Singapore unit then lent the operation about GBP500,000 to keep it afloat while it worked towards the reassessment.
However, AEX Education, which also runs colleges in the UK, Ireland Cyprus and Malaysia, Monday said that Singapore regulator had concluded that it still did not meet all the criteria to have its license restored.
"AEC can choose to reapply and the board is currently reviewing the requirements to be met and the potential financial impact on the company before applying for reassessment," it said in a statement.
AEC said that in the meantime, it has decided to relocate the financial and administration functions for the region to Kuala Lumpur, and would restructure its sales and marketing operations so that responsibility for Eastern Europe, Western Europe and South America will be centred in London, and responsibility for Africa, the Middle East and Asia will be centred in Kuala Lumpur.
"The board expects these changes to provide cost benefits to the AEC group as well as allowing greater focus on regional revenue growth and profit objectives," it said.
In September, the company had reported a sharp drop in revenues for the six months to June 30, 2013, as growth in Europe was offset by the suspension in Singapore. It did, however, narrow its loss as its London teaching operations returned to profitability.
AEC Education shares were down 23.5% at 3.25 pence early Monday, one of the biggest declines on the London market.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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