Canada: KGIC’s Cornerstone shuts its doors

Published 02/03/2017

Cornerstone Academic College, a language school in Toronto owned by the troubled KGIC group, closed suddenly this week. The school’s students are currently being placed in other language schools across the city.

The closure on February 28 comes just over a month after its parent company was placed into receivership, following a demand from one of its creditors for repayment of CAN$12.3m of debt.

“Languages Canada is working with the receiver and the government to ensure students are able to complete their studies”

Forty-nine students have been affected by the closure, according to Gonzalo Peralta, executive director of Languages Canada. He added that the association will place students in another school through its Languages Canada Education Completion Assurance Program by Monday.

“Languages Canada is working with the receiver and the Ontario government to ensure students are able to complete their studies at another Languages Canada member programme,” Peralta told The PIE News.

KGIC has been struggling financially over the last two years, with revenue declining consistently over that time. Cornerstone’s Vancouver campus closed in September 2015, along with two other school campuses owned by the then-Loyalist Group, after the company’s stock prices reached a 52-week low.

And in its most recent financial statement, the company reported a net loss of $1.7m for the third quarter of 2016, along with adjustive negative EBITDA of $1.35m.

Peralta said that Language Canada’s member schools in Toronto have been contacted about the closure, with many offering places to the affected students.

“We are very sorry that students have been impacted by this event, and promise to move quickly in order to minimise impact on them,” he added.

KGIC has 18 school campuses across British Columbia and Ontario.

The company was placed into receivership after a financial entity owned by CIBT Education Group bought and demanded repayment of $12.3m of KGIC’s debt.

BDO Canada was appointed the official receiver overseeing the restructuring and likely sale of KGIC. Sprott Shaw Degree College Corp, another subsidiary of CIBT, was placed in charge of its day to day operations.

The PIE News has reached out to Cornerstone Academic College and KGIC for comment.

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