TFC, MBSL take over crisis-ridden Ceylinco Sussex College

The Merchant Bank of Sri Lanka (MBSL), decision to intervene in the management of the crisis-ridden Ceylinco Sussex College, yet another multi-billion rupee enterprise of the troubled Ceylinco Group.

Approximately 60% of the assets of the Sussex College are financed by The Finance Company (TFC) while the rest of its assets are funded by bank loans, private individual investments and through Profit Sharing Co. Ltd. The MBSL, working as the Management Agent of TFC, is in the process of taking over the management of Sussex College turn the Company around and formalise a majority share ownership of the College by The Finance Company.

Chairman MBSL Janaka Ratnayake said that MBSL's intervention is a far-reaching decision, since closure of the Sussex College would have social, political and financial implications on the larger economy. Consider the impact of a closure on over 5000 students studying in a network of 20 colleges spread over many districts. These students are studying for local national examinations in the English medium. At a time that many public schools are closing down their English medium classes due to shortage of staff, students of the Sussex College will not find admission to suitable schools. Many international schools prepare their pupils for overseas examinations and not local examinations as Sussex College does.

This could have far reaching political implications especially at time when the government is preparing for general elections, he said.

"It is a fundamental responsibility of the MBSL to assist market forces to manage financial risks and efficient fund movements. This step to undertake the turn-around of a large and failing enterprise is expected to make a very positive contribution to the stabilisation processes undertaken by the Government and led by the Central Bank of Sri Lanka", the Chairman said.

Sussex College employs over 900 persons of whom over 2/3 are teachers who are well-trained in the English medium of instruction.

The educational programs of the College are also well-designed and delivered with quality. As a result of the financial and management crisis that has prevailed in the network of colleges, many employees have not been paid their salaries for the last two months, bills have not been settled and agreements with clients have not been honoured.

The College has been ailing due to unwise financial strategies and practices, ambitious expansion efforts, poor management and strong links to ill-fated banking and financial institutions with the Ceylinco Group. After analyzing the situation, the MBSL decided to take this step because the benefits of success, it knows, would be great.

Recognising the centrality of sound management practice in the overall turn-around strategy for Sussex College, the MBSL selected the management guru of Sri Lanka, Prof. Gunapala Nanayakkara to provide leadership to the process of change.A senior Professor of Management at the University of Sri Jayewardenepura, Prof.

Nanayakkara has an unbeatable track record of pioneering the Postgraduate Institute of Management and building it to the current level of national visibility and self-sustenance.

He also has wide and varied management experience in government, private and international spheres.The new management's priorities are to (a) sort-out payment issues and improve liquidity (b) stabilize parents confidence in the Colleges viability, and (c) improve the overall management of administrative and academic processes.

The MBSL is parallely working on the concerns of investors in the College.

A new formula will be offered to them ensuring the protection of their assets while they receive a yield on their investments.

The new management has already met the principals of the colleges as well as the representatives of parents. These interactions will continue with a one-day workshop with College Principals and Vice Principals followed by visits by the top management team to Colleges in the districts to meet both staff and parents.

With its new name - Sussex College Network - this unique educational institution will be taken through new initiatives and strategies of diversification and expansion in the near future so that the revenue stream of the College reaches levels sufficient to meet its multi-faceted financial needs in the long-term.