Hard lesson for iCollege as three subsidiaries sent into liquidation
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Online education provider iCollege has sent three troublesome subsidiaries into liquidation.
iCollege (ASX: ICT) is ridding itself of Management Institute of Australia (MIA), Management Institute of Australia No.1, and Management Institute of Australia No.2.
All three are subject to a lawsuit from their former owner, Michael Walker, who claims iCollege owes him up to $9 million from the sale.
iCollege says it cancelled $8 million in payments after finding out — after the purchase in early 2015 — that the companies were not worth the $10 million it had agreed to pay.
MIA was written off the company’s books as a $4.9 million impairment charge and the two subsidiaries were deregistered between September 2016 and May 2017.
“The financial effect the MIA liquidations will have on iCollege will be nil, with each operation wound down and becoming dormant at the start of the 2017 financial year,” the company said.
iCollege banked $563,000 in receipts for the June quarter but burned through $993,000, leaving just $10,000.
iCollege’s shares are trading at the bottom of their 52-week range of 1c to 6c. The company’s market value is a tad below $2 million.
An increase in student enrolments in South Australia was expected to contribute $2 million in cash this financial year, the company reported at the end of July.