Brazil: Despite accounting errors, Kronos stands firm on Estácio purchase

Kroton Educacional SA, Brazil’s largest for-profit education group, reassured markets last Friday, saying they expect to receive full approval from shareholders to move forward with their much-awaited purchase of main rival Estácio Participacões SA. The deal had seemed to falter after accounting errors were discovered in Estácio’s documentation presented as part of negotiations.

Kroton’s board has said that the revisions by Estácio do not alter their own risk calculations. However, Estácio’s quarterly gains plummeted into red after their last-minute book-checking.

The situation exemplifies some of the obstacles the companies must still face as they try to create the world’s largest for-profit education group, serving over 1.5 million students. Both companies have been hit with spikes and drops in their share prices as the markets reacted to Estácio’s announcement of losses for up to 20 million reais.

Full Content: Yahoo! Finance

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