01/02/2010 - 14:32

Perth language school shuts doors

01/02/2010 - 14:32

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The administrator of GEOS Perth says the school will not be re-opened, displacing nearly 500 international students enrolled in English language courses at the school that operates out of St Mark's International College in Highgate.

The administrator of GEOS Perth says the school will not be re-opened, displacing nearly 500 international students enrolled in English language courses at the school that operates out of St Mark's International College in Highgate.

Late last week, Justin Walsh and Adam Nikitins from Ernst & Young were called in as voluntary administrators of nine companies that operate eight English language schools across Australia including in Perth, Melbourne, Sydney and Adelaide.

Today, the administrator said the financial situation of the companies was such that the schools were not able to be re-opened.

"We are working with the Federal Department of Education, Employment and Workplace Relations and relevant state government departments in relation to alternative arrangements for students," E&Y said in a statement.

"Government agencies will also be holding information meetings for affected students in relation to consumer protection and alternative arrangements from Wednesday this week."

About 480 students in Perth are affected by the school's shut down. Overall, the schools had about 2,300 students enrolled from 20 different countries including Brazil, Colombia, South Korea and Turkey, and employed 390 people.

"We are continuing to investigate the financial affairs of the companies and will report to key stakeholders in due course," E&Y said.

E&Y administrator Vince Smith told WA Business News the schools are a wholly-owned operation that was founded by the GEOS Group in Japan, which owned more than 500 colleges in the country at its peak.

It's believed the Japanese group has undergone a restructure however Mr Smith said whether that was a result of financial distress or not is not known.

"I understand that they may have shut some of its own colleges [in Japan] in the last year or so," he said.

Mr Smith added that the exact reasons for the financial distress and the lack of working capital of the GEOS colleges in Australia were not yet known.

However he said E&Y were able to assess that the companies lacked sufficient working capital to operate for another week.

The priority right now was to find exactly how much and where the debt was within the nine companies, Mr Smith said.

"It's hard to get the consolidated picture yet," he said.

He added that some interested parties had come forward expressing interest in taking over the GEOS operations.

 

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