PETALING JAYA: Education provider SMRT HOLDINGS BHD and private equity firm Creador have given themselves a one-year timeframe to turn around Masterskill Education Group Bhd’s (MEGB) Asia Metropolitan University (AMU).
The new substantial shareholders of MEGB will bank on SMRT’s experience and success in reviving Cyberjaya University College of Medical Sciences (CUCMS). SMRT chief executive officer Datuk R. Palan may include joint marketing efforts to boost student enrollment at the two institutions now under the group’s control.
“We will be undertaking all forms of student recruitment strategies for the approved programmes,” he told StarBiz.
The immediate aim is to grow the intake at AMU to 3,000 students over a period of two years. This would translate to a growth of 35% per year.
It was only five years ago that AMU had about 14,000 students. This number has now drastically fallen to about 1,800 students, with 85 under the medical programme.
“What is now required is the need to attract students, continuous programme and faculty development to fix the revenue side.
“Given the huge opportunities and the thirst for learning among the Malaysian public and Malaysia being a magnet for foreign students, we strongly believe that AMU can achieve profitability and growth with the input of right professionals and guidance,” Palan said.
Both SMRT and Creador are confident that they would be able to turn around MEGB’s operations, and break even, with the combination of Creador’s strategy and financial expertise, as well as SMRT’s experience in the education sector.
To recap, SMRT and Creador had offered to buy a 30.75% stake from major shareholder and executive director Siva Kumar M. Jeyapalan for RM112mil or 60 sen per share.
Creador will take up a 7.75% stake in MEGB, thus increasing its existing stake to 27.02%, while SMRT will buy up the remaining 23%.
“There is downside protection as not only is there a backing of the assets and cash to run the business, there is tremendous potential for additional revenue,” he said.
SMRT is no stranger to the educational sector, having successfully turned around ailing CUCMS after it acquired the medical university college last year.
CUCMS had been making losses in 2011 and 2012, mainly because it exceeded the quota on medical students and had to bear the placement cost for close to 100 students.
It has since turned around and SMRT expects to grow the student intake by 20% every year. CUCMS already has 2,850 students enrolled, out of which more than 750 are pursuing medical degrees.
Synergies would be created between CUCMS and AMU, Palan said, in areas such as student recruitment, support services and manpower.
AMU offers regulated programmes such as medical and pharmacy. Also, its full university status presents a great opportunity for it to grow. It has AMU campuses in several cities, namely, Kota Kinabalu, Kuching, Kota Baru, Johor Baru, Ipoh, Petaling Jaya and Kuala Lumpur.
“The more efficient ones grow and whoever that has not grasped the market will probably fade away. So I see consolidation as a natural process in that sense,” Palan said.