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News Breaks
June 19, 2014
12:10 EDTCOCOCorinthian Colleges warns on ability to continue as going concern
Corinthian Colleges disclosed in a regulatory filing earlier that on June 12 the company received a letter from the U.S. Department of Education that requires the company to provide additional information to the department and informed the company that it has transferred all company schools from Advance Payment to Heightened Cash Monitoring 1, effective immediately. The company said, "In the ordinary course such funds are available for drawdown by the company within 24 to 72 hours of the request. However, ED has imposed an additional stipulation delaying drawdown of the requested funds for a period of 21 days. ED’s transfer of the company’s schools from the Advance Payment method to HCM1 status, plus the imposition of the 21-day waiting period before drawing down funds, will adversely affect the timing of the company’s operating cash flows and is expected to result in a significant shortfall in the company’s operating cash flows. The company is seeking relief from ED for the 21-day waiting period required by the June Letter, but has been unsuccessful to date in its efforts to obtain such relief. If such relief is not provided, the company’s existing cash balances will be insufficient to sustain it through this transition period, and therefore the company would need to immediately obtain other sources of liquidity, which may not be available. The company has engaged in discussions with its credit facility lenders in order to obtain financing to bridge the shortfall in operating cash flows during this transition period, but the lenders have indicated they will not provide any such financing. If the company is unable to timely obtain alternate financing, the company’s cash flows will not be sufficient to meet its obligations as they become due, which would cause the company to be unable to continue as a going concern."
News For COCO From The Last 14 Days
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October 16, 2014
17:30 EDTCOCOCorinthian Colleges enters into Forbearance and Consent Agreement
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October 15, 2014
07:07 EDTCOCOFor profit education positive catalysts outweigh negative, says Wells Fargo
Wells Fargo expects for-profit education stocks to benefit from improved hiring trends and a sale by Corinthian of its assets that, according t othe firm ,would set a valuation floor for the sector. The firm continues to believe that the final gainful employment rule will be neutral to positive for the group. Wells favors the option value on the long side for the sector. Publicly traded companies in the space include American Public Education (APEI), Apollo Education (APOL), Bridgepoint Education (BPI), Career Education (CECO), Corinthian Colleges (COCO), DeVry (DV), Grand Canyon (LOPE), ITT Educational (ESI) and Strayer (STRA).

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