KGIC, formerly Loyalist Group, in Canada, is under new management again and has secured the investment it needs to stay in operation, after a down to the wire bid in December to attract additional financing in order to continue operating into 2016.
The company has, for the second time in six months, brought in a new management team. Speaking exclusively to The PIE News, KGIC’s newly appointed CEO, Alex MacGregor, and chairman, Geoffrey Smith, outlined plans to reinvigorate the beleaguered brand and spoke of mistakes made by their predecessors.
MacGregor underlined “perception problems” created by the former management when they took the decision to close down three of its school campuses: PGIC in Victoria, KGIC Halifax and Cornerstone Academic College in Vancouver.
“The Optimization Plan meant that we were going to be closing down schools, and when you do that, you’re sending the wrong message to the agencies,” he said. “The agencies basically got panicked and as a result of that, the revenue suffered.”
The company now owns and operates 11 brands of ESL schools, career and community colleges across 25 campuses in Canada. It announced that five company directors had resigned and that it had reached an agreement with its senior lender, the Bank of Montreal, just a week after it saw its stock drop to a 52-week low of $0.005 on December 14.
Last week, KGIC received initial commitments from existing shareholders towards raising gross proceeds of up to CAN$3m.
“We are going to continue dealing with agencies, that goes without saying, but we are not going to be exclusively dependent on them
“The initial commitment allowed us to step inside, understand what was going on with the previous management, understand what obligations needed to be prioritised and what action needed to be taken to stabilise the revenue,” said Smith, who replaced former chair Shant Poladian.
MacGregor, president of the Toronto Institute of Pharmaceutical Technology who replaced CEO Shawn Klerer, said they plan to use more of a “surgical approach”, consisting of going into detail to identify inefficiencies.
“Most of our problems are with our overheads; we have a lot of general admin overheads,” he noted.
KGIC also announced last week that it has entered a strategic partnership with India-based Guru Kashi University and BIS Education Group.
This partnership will give KGIC access to up to 25,000 students entering Canada annually through this group of schools.
“It’s also a way to differentiate the quality of our ESLs from those who are not able to even meet other partners to forge this kind of relationship with universities,” said MacGregor.
“Establishing a feeder system to those [English teaching] institutions bypasses some of the issues with agencies that could impact adversely on the revenue,” he added.
Despite this move, MacGregor assured that KGIC will not be cutting out its agency partners.
“The problem is the perception that was created by this former management”
“We are going to continue dealing with agencies, that goes without saying, but we are not going to be exclusively dependent on them,” he said.
“We want to foster partnerships right across most of these countries we’re dealing with: India, China, Japan, Taiwan. It’s beneficial for us, it’s beneficial for those universities abroad and it actually also reduces our overheads, reduces the cost.”
However, MacGregor underlined that none of the group’s schools or operations are being affected during the company’s changes.
“There’s going to be a bit of a transition period because people have to realign themselves with the way that we are thinking,” he said.
“But the schools are open, the schools are operating and the students are being taught.”
