Vocation Ltd (ASX: VET), the embattled education provider, has continued offloading its businesses in what is a last-ditch effort to ensure the continued survival of the business itself.
After having sold its Australian School of Management and Australian College of Applied Education for $15 million earlier in the week, Vocation has today revealed that it is also selling the Endeavor College of Natural Health to Study Group for $75 million. The British-based Study Group said that it was confident that the media-dubbed "Vocation contagion" had not impacted the Endeavor business at all.
Vocation Contagion
The term 'Vocation contagion' refers to the slate of controversy that has surrounded the company since September last year. The controversy is the result of multiple earnings downgrades, legal actions and pressure from creditors after a major funding contract was withdrawn by Victorian education authorities.
Indeed, Vocation's banking syndicate, made up of Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd. (ASX: NAB), have pressured the company to sell its assets in order to continue receiving support. The funds raised from the sale of the three businesses this week will be used to reduce the bank loan facility limit from $85 million to circa $10 million.
Should you buy?
At this stage, it is unclear how Vocation will perform in its slimmed down form, although its current price of 8.1 cents per share indicates investors aren't too confident. The company said: "In the coming weeks, Vocation expects to announce the final outcomes of the strategic review, its expected capital and corporate structures, and its revised financial guidance incorporating the changes to the business portfolio."
Given the company's woeful track record, investors would be wise to steer clear, at very least until further light is shed on its structure and strategies moving forward.
