Embattled English language school says revenues back on track after restructuring

Its CEO, Nguyen Anh Tuan, told a recent shareholders meeting that the income has risen from VND465 million in April to VND2.78 billion (US$117,000) in July.

He attributed it to a year-long restructure lasting until the first quarter this year.

Before the restructuring the school operated by education company Apax Holdings had no revenues following complaints about teaching quality, failure to pay teachers’ salaries and delays in refunding tuition fees after closing several branches.

Apax Leaders now has 37 centers, mostly in the north, and more than 11,100 students, double the number in March.

But before the crisis, it had had 120 centers and 120,000 students.

Now at branches that it has currently reopened, parents have continued to come and request to withdraw the tuition fees they had already paid for their children.

"The latest revenue figure is still nothing, but we have yet to give priority to enrollment and earnings and are focused on improving quality," Tuan said.

In 2018-20 Apax Holdings regularly reported revenues of VND100 billion a month.

In the first quarter of 2020, before the Covid pandemic broke out, they had topped VND600 billion.

This year it hopes to enroll 20,000 students and earn revenues of VND20 billion a month by reopening branches in the south, including at least eight in Ho Chi Minh City.

"As long as Egroup has financial resources, Apax Leaders’ productivity will double," Tuan said.

Parents gather at an Apax Leaders branch in HCMC's Phu Nhuan District to withdraw the tuition fees they had paid, March 2023. Photo by VnExpress/HN

Nguyen Ngoc Thuy, aka Shark Thuy, chairman of Egroup, the parent company of Apax Holdings, said Egroup is "arranging resources."

Thuy pleaded with investors not to demand interest anymore and accept cuts in interest payable until now.

"Financial costs are a big burden causing obstacles for the company to recover.

"August is a very important period for the education industry as the new school year starts. If we can take back the southern market, it will create a great impetus for the group to recover."

Last December hundreds of people showed up at Egroup’s offices and Thuy’s house to demand a refund of their investment as the company failed to pay them the promised interest after signing "strategic partnership deals" with them.

In February this year Thuy said Egroup was facing severe difficulties, including a lack of cash flows, as Covid lockdowns forced the closure of its schools over the last few years.

It would take two or three years to recover, he said.

In June Egroup offered to prioritize payment to creditors who were in a "difficult situation," including elderly and sick people, starting July.

To the others, it offered two options: either wait for three or four years to be paid after the restructure is complete or convert the debts into other assets such as credits for English courses, household appliances and other investments.

An investor in Hanoi said his family had put VND3 billion into Egroup, including most of his parents’ savings.

His family’s situation is now difficult and both his parents have heart disease and diabetes but they are not in the list of creditors whose situation Egroup considers grave based on the criteria it has set, which include being 80 years or more and hospitalization for a month.