Advising a relative owning a school in this difficult times

Looking forward to the future of business

Rizal Philippines

3.25.2021

A relative, a cousin has enlisted my help to advise her on the proposed sale of their 38 year old school to group engaged in real estate development.   She has the appraisal of the land and building  and ready with the financial statement.  

The appraisal says P200 million, but her balance sheet says P100 million.   She wants to sell because she is behind her loan amortization for 6 months,  and finds difficulty in raising enough cash for salaries of teachers.  

Some questions were raised:

1.  Is it true that this group is buying school, when they are closed and no revenues, that the time of reopening is unclear

2.  If the news was true  then most probably the group is on a vulture bargain hunting mode and most probably if they notice that they are desperate.   They would probably bid  P40 - 50 million.  

This post proposed a two pronged action plan

1  Prepare a presentation   video or power point to emphasize the strong points of the school

2.  Ad hoc measures to raise cash for the school:    discounts on advanced payment,  collection drive,  (and even incentivize payment)    

       We need to raise funds to restructure the loan, and to pay the salaries.  

We pray these work.