Santa Ana-based Corinthian Colleges Inc. said it will sell its Heald schools as part of an agreement with the U.S. Department of Education.
Putting Heald—one of four brands owned by the for-profit operator of vocational and technical schools—on the block is the first element of a restructuring plan taking shape under terms of the deal with regulators.
Corinthian had agreed to sell or phase out programs at its more than 100 campuses in the United States and Canada in return for access to $16 million in federal financial aid funds it said it needed to continue operations.
The Department of Education had imposed a longer-than-usual waiting period for Corinthian to get financial aid funds amid investigations into the company’s job placement claims and advertising.
Corinthian’s portfolio of brands, which also includes Everest, WyoTech and QuickStart Intelligence, offers courses in the automotive, business and legal, information technology and health-related fields.
Heald is thought to be one of its better performing divisions. It has 12 campuses in California, Hawaii and Oregon.
Corinthian said it had not found a buyer for Heald but expects to complete a sale within six months, according to reports.
A final plan for disposition of its programs is due later today, when the $16 million in operating capital is expected to run out.
Corinthian likely has some leeway on timing because its lenders recently agreed to let it draw down a final $9 million in loans after the company agreed to sell or phase out certain operations.
The lenders had blocked Corinthian’s access to the money.
Corinthian’s shares were down 4% to $0.28 and a market cap of about $24.9 million in early trading today.