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Outrages

  

9486 in the collection  

    Capitalism At Work: Edison Defaults on $60 Million in Loans

    4:48 p.m. EDT May 23, 2003 - Edison Schools, the country's largest for-profit manager of public schools, has defaulted on almost $60 million in loans, according to a regulatory filing.

    The financials of Edison Schools Inc. haven't measured up to the terms of $59.5 million in loans, but the country's largest for-profit manager of public schools has received waivers from its lenders, according to the filing.
    Edison's consolidated tangible net worth didn't reach loan-agreement requirements at the end of the fiscal third quarter on March 3, according to the Securities and Exchange Commission filing.

    The lenders, School Services LLC and a unit of Merrill Lynch and Co., issued waivers for the net-worth requirements in May.

    The filing was made May 15, a day after Edison apparently broke from a long streak of disappointments by reporting a much-narrower loss for its latest quarter.

    Edison didn't mention the loans in its earnings report or a conference call with analysts, when it talked up its forecast to post a profit in the fiscal fourth quarter and the next fiscal year, for the first time in its 10-year existence.

    "The company expects to be back in compliance with this covenant at June 30 . . . based on projected fourth-quarter operating results," Edison said in the quarterly filing.

    Edison said Wednesday it was renegotiating contracts with Philadelphia public schools, which have been a big trouble spot for Edison, but the company wouldn't discuss the contract terms. The Philadelphia Inquirer has reported that school chief Paul Vallas wants to sharply reduce compensation to Edison.

    Edison has been mum on the status of a potential management buyout, which it unveiled earlier this month. It said at the time that Chief Executive Chris Whittle and other executives hadn't yet arranged financing.

    Shares of Edison closed Friday at $1.55, up 5 cents, or 3.3 percent, on the Nasdaq Stock Market

    Edison Defaults On $60 Million In Loans
    MSNBC News
    May 23, 2003
    http://www.msnbc.com/local/wcau/A1631061.asp?0na=x227Z180-

    INDEX OF OUTRAGES

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