LONG-TIME managing director and executive of G8 Education (ASX: GEM) Chris Scott has announced his retirement, on the same day that his company has emerged from a trading halt to raise $100 million in a new institutional placement.
Scott has been central to the growth of the Gold Coast-based G8 Education since it began life as listed company Early Learning Centres.
Under Scott's stewardship, Early Learning Centres merged with Payce Childcare to become the G8 Education we know today, and during his tenure he has overseen several major milestones to cement the company's status as a market leader.
When the education sector in Australia was still reeling from the global financial crisis and the implosion of ABC Learning in 2010, Scott managed to inspire a $20 million capital injection from reluctant investors which supported the basis of G8's core infrastructure.
Since then, Scott has continued to see the company through a gruelling climb to the top of its industry.
SCOTT'S RETIREMENT TIMELY AS G8 CUTS TIES WITH CHINA
Some time ago, Scott announced his intention to help transition the company to a new CEO and work on several strategic projects, including the possibility of new opportunities for G8 in China.
In this sense, Scott's retirement could be viewed as judicious, as G8 also announced today that it will be cutting ties with China after one of its main investors, CFCG Investment Partners International (CIPI), terminated a significant agreement worth $149 million.
Earlier in the year, G8 announced that CIPI would invest about $212.8 million by subscribing for almost 54,850,000 new shares at an issue price of $3.88 per share.
CIPI paid the first $63.8 million tranche of its placement on 24 February, however when G8 went into a trading halt last week, it was reacting to CIPI's request for a 180-day payment extension on tranche two.
After consideration, G8 management determined that granting the extension was not in the best interests of its shareholders, and terminated the second tranche of the placement.
Managing director Gary Carroll said the board's disappointment with the Chinese company's actions is clear, however he affirms that G8's key initiatives remain steadfast.
"It was surprising and disappointing that CIPI did not fulfil its payment obligations under the share placement," says Carrol.
"It is, however, pleasing to see the support from our shareholders during this period which has been exceptional and very much appreciated.
"Our strategic initiatives remain on track, and these are expected to generate good growth in both occupancy and returns over time."
Instead of the initially proposed second tranche, G8 an CIPI have agreed to a revised scheme that will see CIPI subscribe for 8.2 million shares at a price of $3.88 per share, amounting to $31.8 million of proceeds for G8.
G8 has agreed to release CIPI from all liability in relation to its default on the original agreement.Never miss a story: Sign up to Business News Australia's free news updates
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