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Yosi Tanco piles up P380M losses in STI in 15 months, grabs P250M emergency loan from Landbank after tapping out China Bank’s P1.2B loan facility

Bilyonaryo Yosi Tanco’s education business is sinking deeper in red ink and debt.

The 36th richest Filipino with $200 million in assets owns STI Education System and Holdings which has piled up P380 million total losses from April 2019 to June 2020 and P627 million in interest expenses in 27 months from March 2018 due to mounting cash problems compounded further by the pandemic.

READ: Survival daw: Yosi Tanco’s STI-PhilPlans fund in P3B deficit hole since 2018…or 2 years before COVID

In a financial report by STI president and CEO Monico Jacob, the IT school reported a net loss of P228.5 million in its first quarter of fiscal year ending March 2021, after incurring a net loss of P150.348 million in losses in fiscal year ending March 2020.

READ: SEC trains guns on alleged Moron scam partner Sulapas and his account in Venture Securities owned by PSE director Eusebio Tanco

Jacob blamed the losses to the imposition of lockdowns (beginning in March 2020 in areas where the STI campuses were located which forced the school to complete its 2019-2020 school year in July 2020. (Revenues are expected to be lower in the first quarter of its fiscal year because its revenues from tuition and other school fees are recognized as income over the corresponding academic year).

READ: SEC bans R&L auditor KL Siy, slaps P314k fine for P606M stock scam: But mum on Venture Securities of Yosi Tanco

STI added P84.5 million in interest expenses in the first quarter of FY 2021, after incurring debt costs of P314 million in FY 2020 and P228 million in FY 2019.

Jacob said that while events surrounding the outbreak did not significantly impact STI’s in the first quarter of FY 2021, “the outbreak could have a material impact on its 2021 financial results and even periods thereafter… considering the evolving nature of this outbreak, the Company cannot determine at this time the impact to its financial position, performance and cash flows.

As of September this year, STI has shut down permanently one of its schools, STI Pagadian, and seven franchisees – STI College Bohol, STI College Recto, Sungold Technologies in Zamboanga, STI College Pasay, STI College Dipolog, and STI College San Francisco. It also suspended operations of five of its campuses – STI Cebu, STI Iloilo, STI Quezon Avenue and STI Tuguegarao – and one franchisee, STI Parañaque, for SY 2020-2021.

Amid its mounting loans, STI borrowed P250 million from the Land Bank of the Philippines’ ACcess to Academic Development to Empower the Masses towards Endless Opportunities (ACADEME) fund last September to “finance the ‘study now, pay later’ program of the government for students amid the financial difficulties families are facing due to the COVID-19 pandemic.”

Under ACADEME, STI can borrow up to 70 percent of the amount stated in the promissory note issued by the parents/benefactors of the students subject to three interest per year.

STI revealed that it had to seek the waiver or consent of its major lender, China Banking Corp., to enable it to access Landbank’s loan rediscounting line. STI said it has fully drawn from the P1.2 billion loan facility it availed from China Bank in May 2019 to finance its campus expansion, acquisition of schools, and refinancing of short-term loans.

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