The High Court has appointed an interim examiner to a group of companies that provides 70 online education courses to more than 4.5 million students globally.

Shaw Academy Ltd, and two related firms – Shaw Education Group plc and Academy of Financial Trading Education Ltd – sought the protection of the courts after its largest creditor made demands last week on the group to repay loans of €5.7 million.

The group cannot meet that demand, and the lender, a Luxembourg-based entity called Columbia Lake Partners Growth Lending, had threatened to appoint a receiver and manager over the companies unless its demand was satisfied.

At the High Court on Wednesday morning Mr Justice Denis McDonald said he was satisfied to appoint insolvency practitioner Stephen Tennant of Grant Thornton as interim examiner to the group.

This was because an independent expert’s report had stated that in the event of the examinership process being successful, the company has a good prospect of survival.

The judge said Mr Tennant would try to reach agreement with the group’s creditors and seek potential investors in the group, which would rescue the companies.

Best interests

Noting that the deficit would be significant if the firms were liquidated, the judge was further satisfied the appointment was in the best interests of the creditors and would reassure the many students currently undertaking courses with the group.

Stephen Byrne BL, for Shaw Academy, which applied for the protection of the court, said the businesses had been trading profitably and had experienced growth in terms of student numbers and revenues in recent years.

However, it had entered financial difficulty after the main creditor issued its demand. The Luxembourg fund had lent the group €4.65 million in 2017 and the monies were due for repayment in November 2018.

Counsel said his client had been proactive and had been in talks with a potential investor, who had withdrawn in late December.

In addition, counsel said that the company’s directors and senior management had made cuts to their remuneration and to staff numbers.

Following the main creditor’s demand, the group had “run out of road” and was seeking to enter examinership, Mr Byrne said.

Established in 2012

Counsel said Shaw Academy, with a registered address at Fitzwilliam Street Upper, Dublin 2, was established in 2012 by James Egan and Adrian Murphy, and the business has grown from 10,000 students to 4.5 million in 2018.

The group initially offered courses in subjects linked to finance, but has expanded to offer courses in diverse subjects such as photography, business, beauty, music, language, design and technology.

Counsel said his client has grown its revenues to €7.2 million in 2018.

The group employs 66 people, with 14 people based at its education hub in the State, with others at a technology centre in Bangalore, India.

Counsel said the independent expert had indicated that there is a strong likelihood the business will survive if the examiner puts together an agreed scheme with its creditors.

The examiner would not only conduct negotiations with potential new investors but also give comfort to the group’s many students, counsel added.

After appointing Mr Tennant as interim examiner, the judge adjourned the matter to a date later this month.