Masterskill stake for sale?

The controlling block of shares attracts at least two parties

PETALING JAYA: A controlling block of shares in Masterskill Education Group Bhd may be up for sale with at least two parties said to be interested.

Sources said the block of shares up for sale could come from existing major shareholders who are interested in having a strong, strategic partner come into Masterskill.

Among the interested parties are said to be a government-linked fund, which has a presence in healthcare and would like to extend the education aspect of that sector. Another party is said to be large education group.

The top substantial shareholders of Masterskill are founder Datuk Seri Edmund Santhara with 22.1%, private equity firm Crescent Point with 21.5% and Siva Kumar Jeyapalan with a 10% stake.
Endless woes: Masterskill is facing low student enrolment arising from the higher nursing minimum entry requirements

Heavy trading volume was seen recently after the emergence of Siva as a substantial shareholder of the education group, following his acquisition of 41.2 million shares, or a 10.05% stake on Oct 5.

When contacted, Siva downplayed any likelihood of a sale and only said he would consider to exit the group if the price offered is comfortable for him.

“I acquired the shares from the open market and I believe in the business and the opportunities it present, which is worth more than what it is trading at right now,” he said.

He also expressed his disappointment at the group's recently announced quarterly results.

“To be very blunt, I am not happy with the results. The board needs to buck up and I have made known my concerns to the board,” he said.

Masterskill's third quarter ended Sept 30, 2011 saw its net profit plunging by a significant 78% year-on-year to RM5.5mil from RM26.18mil. Revenue shrank by 24% to RM61.2mil. It stated that part of the reasons for the declining numbers was weak student intakes.

Masterskill has been faced with low student enrolment arising from the higher nursing minimum entry requirements, coupled with a shift in industry trend whereby fewer students are pursuing diploma courses in private education institutions.

There seems to be no end to Masterskill's woes as the group was dealt with another setback when the National Higher Education Fund proposed to reduce loans for students studying at high educational institutions.

Before Masterskill was listed, Siva was the founding member of the group before he sold his stake to Crescent Point back in 2006.

Meanwhile, Edmund could not be reached for comment.

The stock has fallen sharply from its IPO price of RM3.80 in May last year, and reached an all-time low of RM1.06 on Oct 3.

The counter is currently trading near its all-time low at RM1.09 and at a price to earnings ratio of only 5.79 times.

It was speculated last year that Crescent Point was looking to sell their stake in Masterskill in a deal that could fetch more than US$200mil.