The international private school provider GEMS Education says it has secured a $1.25 billion loan to pay for refinancing debt and the company’s continued expansion in the fast-evolving global market.
The company said in a statement that the financing came from a group of banking institutions: Abu Dhabi Islamic Bank, HSBC Bank Middle East, Noor Bank, MashreqBank, and Emirates NBD Capital.
The move provides GEMS Education with “improved financial flexibility and resources to continue to invest in providing a quality education for all students,” the company said in a statement.
GEMS operates schools in countries and regions across the world. Its website lists schools in the United States, Britain, Uganda, Singapore, Egypt, France, the United Arab Emirates, and Malaysia, among other locations.
“Clearly, the core of [GEMS’] business is in the Middle East, and they continue to focus on the core,” said Robin Wrench, a spokesman for the organization, in an interview. “There’s still a lot of potential for growth in the core model.”
Since fiscal year 2014, the company says it has invested more than $1 billion in building new schools, as well as revamping infrastructure and supporting the training of its teachers.
The founder and executive chairman of GEMS Education is Sunny Varkey, a native of India who was a child when his parents moved to Dubai in 1959 and founded a school there. Varkey gradually expanded family’s school operations and laid the foundation for GEMS Education, which he has since led through a period of international growth.
Varkey also leads the Varkey Foundation, a nonprofit that seeks to improve education for disadvantaged youth around the world.
Reuters reported that GEMs Education had drawn down $900 million from the seven-year loan. The news agency also had reported in October that GEMS was planning a loan in order to streamline its organization before making an initial public offering of shares in London.
Wrench noted that there has been speculation about an IPO for GEMS Education for several years, and that the company was keeping an “open mind” about its capital structure.
GEMS Education said the company increased its revenues by 17 percent over the past year, and that its enrollment has risen by 10 percent.
Demand for private school education has surged in many regions across the world, fueled in part by rising family incomes and parents’ desire to prepare their children for college.
One measure of this growth is the rise of the number of international schools, which a private organization that tracks the schools, ISC Research, defines as those that deliver an overseas or international curriculum, wholly or partly in English, outside of an English-speaking country.
Between 2000 and 2017, the number of those private schools worldwide jumped from 2,584 to 9,319, and enrollment soared from 950,000 to 5 million, according to ISC. Total fee income from those schools has climbed from $4.9 billion to $47.4 billion during that period. And ISC projects much more growth ahead.
The UAE, where GEMS Education is based, has emerged as a major hub for private education: The nation of 9 million residents has nearly as many international schools, 600, as China does. See EdWeek Market Brief‘s recent story offering an overview of education in the UAE, and an interview with the director general of one of the main agencies that oversees its private schools.
This post has been updated with comments from a GEMS spokesman.