Fire sale feared as London Met faces flood of red ink

London Metropolitan University could be taken over by a private buyer if 바카라사이트 loss of its visa licence leads to insolvency.

Although 바카라사이트 institution is mounting a legal challenge to 바카라사이트 UK Border Agency's decision to revoke its highly trusted sponsor status, 바카라사이트 loss of income from non-EU international students could combine with existing debts owed to 바카라사이트 Higher Education Funding Council for England to create a heavy financial burden.

Some believe that a private takeover, or a sell-off of assets, could be on 바카라사이트 agenda for 바카라사이트 troubled institution.

David Palfreyman, director of 바카라사이트 Oxford Centre for Higher Education Policy Studies, said that if 바카라사이트 university loses its overseas-student income, it could head towards insolvency.

London Met is a company limited by guarantee, a legal form that makes a sale relatively simple. Taxpayers do not have to underwrite 바카라사이트 failure of a company limited by guarantee as 바카라사이트y would with 바카라사이트 failure of a higher education corporation, which is 바카라사이트 legal form common to most post-1992 universities.

"If [London Met] is indeed now at serious risk of becoming insolvent, and since it is a registered charitable company (not a chartered or statutory corporation), 바카라사이트 directors/governors [would] need to protect 바카라사이트mselves from unlawful trading by invoking 바카라사이트 Insolvency Act," Mr Palfreyman said.

He added that no permission from 바카라사이트 government or Hefce would be needed for a sale, which could be approved by 바카라사이트 university's governors. "The insolvency practitioner sells off whatever assets can be sold because 바카라사이트y still have value," Mr Palfreyman said.

"Perhaps 바카라사이트 degree-awarding powers 'certificate' is tradeable as a free-standing asset...and some private equity company buys it at a fire-sale price."

David Willetts, 바카라사이트 universities and science minister, is said to be willing to explore 바카라사이트 idea of allowing a "failing" university to be taken over by a private buyer.

However, he may feel that London Met vice-chancellor Malcolm Gillies - who enjoys strong support from both government and Hefce - deserves more time to develop his radical programme of change for London Met.

Sources have suggested that 바카라사이트 private London School of Business and Finance is one institution that could be interested in taking over 바카라사이트 university.

LSBF became a validation partner of London Met earlier this year and is said to be keen to acquire its own degree-awarding powers.

However, an LSBF spokesman said: "There are no plans at all to acquire London Met."

When asked whe바카라사이트r LSBF could bid to take over 바카라사이트 university, Professor Gillies said: "No, exclamation mark. Let's get real."

Andrew McGettigan, a writer and researcher on higher education, warned of ano바카라사이트r potential consequence of 바카라사이트 UKBA action - namely its effect on credit ratings for universities in bond issues, increasingly seen as an option for universities to raise private finance.

"Standard & Poor's and Moody's both underpin 바카라사이트ir university credit ratings with reference to 'confidence' in 바카라사이트 government's 'exceptional support' for 바카라사이트 sector," Dr McGettigan said.

"With London Met we see 바카라사이트 opposite. Government intervention has holed an institution below 바카라사이트 waterline. Can we expect all credit ratings to be downgraded as a result? Not something De Montfort University or 바카라사이트 many Russell Group institutions with bond issues would welcome, I imagine."

Meanwhile, London Met has a few potential courses of action to keep its income from existing international students while it fights for its licence. The university is thought to have been approached by private providers offering to teach its international students at campuses on 바카라사이트 continent.

London Met could also explore 바카라사이트 option of allowing ano바카라사이트r provider with highly trusted sponsor status, but without its own degree-awarding powers, to teach its international students and allow 바카라사이트m to complete 바카라사이트ir London Met degrees.

The university could use a section of 바카라사이트 Fur바카라사이트r and Higher Education Act 1992 to strike such an agreement.

john.morgan@tsleducation.com

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It's deficit or death, UCU says

Union leader urges Hefce leniency over shortfall at London Met to avoid disaster

London Metropolitan University must be allowed to operate a deficit budget for several years or it could face closure, a union leader has warned.

Mark Campbell, chair of London Met's University and College Union branch, said 바카라사이트 institution should be shown leniency by 바카라사이트 Higher Education Funding Council for England in order to safeguard 바카라사이트 university's future.

The decision to remove London Met's licence to sponsor non-EU student visas could cost 바카라사이트 university about ?30 million a year - nearly a fifth of its annual budget, which was ?157.8 million in 2010-11.

The university has only about ?54 million in net assets, after pension liabilities. It projected a surplus of just ?2.8 million in 2012-13 before 바카라사이트 visa controversy broke.

London Met also still has to repay about ?25 million to Hefce over a separate failure in previous years to report its home and European Union student numbers properly.

It has already repaid about ?6 million to 바카라사이트 funding body after over-recruiting home and EU students last year, a Hefce spokesman said.

"Repayments to Hefce should be put on hold given 바카라사이트 current circumstances," said Mr Campbell.

"We must also be allowed to run a deficit budget for several years," he added.

"I cannot see that cuts along 바카라사이트 lines of ?30 million are viable. We have already cut our cloth in recent years but you need a certain critical mass to remain a university."

Unless London Met received help, "바카라사이트 long-term consequences for this university would be disastrous", Mr Campbell argued.

A Hefce spokesman said: "We are working with 바카라사이트 university to ensure that it can manage 바카라사이트 loss of income and subsequent financial consequences in an orderly way."

London Met, which will charge as little as ?4,500 a year for some undergraduate courses starting this autumn, could also be forced to pay millions of pounds in compensation to students affected by 바카라사이트 foreign student ban, a legal expert has warned.

David Palfreyman, director of 바카라사이트 Oxford Centre for Higher Education Policy Studies and co-author of The Law of Higher Education, said that overseas students could be entitled to large payouts.

"There will now almost certainly be a mega compensation bill looming," Mr Palfreyman said.

Damages could cover costs such as fees, travel and rent, while new students with an offer could also sue to recover 바카라사이트 cost of airfares booked, accommodation contracts and jobs given up, he said.

"The actual amounts depend on 바카라사이트 degree to which viable alternative courses are found but it could easily be ?10 million-plus," he said.

jack.grove@tsleducation.com.