Brazilian administrator of private universities, Anhanguera Educacional Participacoes SA is to use the proceeds from its voting share sell. However, after announcing the plans, the firm has recorded sluggish performance, the worst in a period of five months. Anhanguera Educacional Participacoes is planning to sell as many as 20 million new voting shares to aide in its additional investments in terms of acquisitions and mergers.

The firm’s share dropped by as much as 5.3 per cent following the fund raising move announcement, the worst decline in quite some time. The firm is considering to convert every of its preferred shares into one voting stock. Under its plans, its shareholders who will vote on the plans will be given a single voting share for every seven they already own.

The details of the share offer were revealed in a regulatory filing Anhanguera Educacional Participacoes submitted to the Sao Paolo bourse Thursday. The Valinhos, Brazil-based Company also said it plans to list its stock on the Novo Mercado section of the Sao Paulo exchange. However, analysts have estimated the sale at about 633 million reais ($380.6 million), with the proceeds expected to support future mergers and acquisitions.

Anhanguera Educacional Participacoes SA (AESA) is a Brazil-based private, for-profit professional education company. The Company offers teaching graduate and postgraduate courses and through the distance and professional courses, preparatory courses for competitions and courses extension.

The Company AESA is a holding company which directly and indirectly controls and supports the operations of all of its campuses. As of December 31, 2009 the Company owned 100% of the capital of Anhanguera Educacional SA, Anhanguera Educacao Profissional Ltda, LFG Business e Participacoes. During the fiscal year ended December 31, 2009, the Company acquired all the shares of capital of Centro de Ensino Superior de Goiania Ltda.

The share issue is expected to give the firm a robust funding base from which it should be able to advance its operations in Brazil. Even though the announcement has been by the minor drawback in terms of the declined trading share price, analysts expect the Brazilian education firm will be able to overcome it and perform impressively.

The funds will target investments geared at increasing Anhanguera Educacional Participacoes SA offering and portfolio and reinforcing its placement in the Brazilian higher education sector. Private universities and colleges make up a large percentage of higher education institutions in Brazil, a country with wide disparities in education between the societal classes.

14 Oct 2010