Teachers strike at PGIC as Loyalist Group struggles

30 June, 2015


Teachers at ESL and pathway provider PGIC Vancouver in Canada are striking over salary negotiations, adding to the problems of parent company Loyalist Group, which has recently seen stock prices plummet and has announced a forbearance agreement with its senior lender.



Teachers on strike outside the PGIC campus in Vancouver. Photo supplied by Dianne Simmons


Loyalist Group operates a portfolio of Canada-based international education businesses, including four languages schools, four career colleges, a high school and student accommodation, and has also acquired two Korean study travel agencies in the last six months.

The company share price has fallen from a high of CAN$0.57 on April 23 to CAN$0.08 at the time of writing. A sudden 31 per cent drop in value on June 9 followed the announcement of a loss of CAN$19.5 million in 2014 as well as a 43 per cent drop in adjusted EBITDA to CAN$2.1 million from CAN$3.7 million in 2013.

The reported net income for 2015 Q1 was 482 per cent below the previous year first quarter, while revenue fell 21 per cent.

In a press release issued yesterday (June 29), Loyalist Group said it has executed a forbearance agreement with the Bank of Montreal that provided for a repayment date of September 30 for its acquisition credit facility, subject to the company raising a minimum of CAN$2.8 million of cash from new and existing lenders by July 10. The company owes CAN$8.9 million under the facility.

A non-brokered financing agreement was announced on June 22, under which Loyalist aims to raise a minimum of CAN$2.5 million and a maximum of CAN$8 million through the issuance of 800,000 units at a price of CAN$10.

“We believe a fair and transparent approach is the best path to put Loyalist back on sound footing and rebuild confidence with all parties. We are enthusiastic about the progress we have made thus far, and are energized about the work we have ahead of us,” said CEO, Shawn Klerer.

Klerer was promoted to the role of President and Chief Executive Officer recently, replacing company founder Andrew Ryu as part of major board changes.

A source contacted StudyTravel magazine (STM) to advise that company payments to agents were outstanding, but we have not been able to confirm this.

The four Loyalist Group language schools are members of national association Languages Canada (LC). Gonzalo Peralta, Executive Director of the association, speaking to STM before the PGIC strike (see below), said, “The schools are operating normally at this time and are in full compliance with LC. We feel that the management changes of last week are positive and we wish to support the schools so that they can continue doing what they do best – teaching.”

Teachers at PGIC Vancouver staged a walkout last week over contract conditions. Teacher Dianne Simmons told STM that under current conditions teacher salaries are capped at CAN$35,000 and it would take 15 years for a new teacher to reach that level. “It’s not a serious wage for a serious faculty,” she said.  

“When Loyalist Group took over PGIC four years ago, they reduced wages by 30 per cent. They said within a year we’d get back 15 per cent, but it never came back. We’ve been negotiating for over a year,” said Simmons. She claimed since the last mediation there had been no contact from Loyalist. Simmons has established a union which is part of the Federation of Post-Secondary Educators of BC.

According to local media reports, around 400 international students are affected by the strike. “The students are frustrated,” said Simmons. “Our message [to Loyalist] has been let’s get back to the negotiating table.” She added, “We had a huge group of students come to support us.”

Peralta said, “The labour disruption at PGIC Vancouver is very recent and Languages Canada is keeping a close eye on this and how it may impact students at that school. We have had previous member programmes, both public and private, go through something similar without the need for LC involvement. We hope that the teachers and school management come to terms very quickly.

“PGIC has informed LC that they are in close contact with students and agents and have promised that any time missed will be credited to the students or refunded if their time in Canada does not permit a longer study period. The school is currently providing activities for the students during the time that classes are not operating.”

The Loyalist Group has not yet responded to requests for comment on the strike, information regarding refunds and agency payments.

At the time of writing, CAN$1 = US$0.81

 

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