Educomp frozen on lower circuit

Educomp has hit a new low at Rs.20.40 today, down 5%, hitting the lower circuit. Over 24,000 shares remained on the ‘sell’ counter.

The stock has hit a new low on news that the company has not been paying salaries to 6,000 staffers for the past three months. The company has stated that with schools not paying up using the Smartclass has led to the delays. Many in the company had sought terminatioin of their contract and many have stopped reporting to work. The company is going through an acute liquidity crunch which is why it seems to have applied for a Corporate Debt Restructuring.