Struggling online learning company 2U Inc. faces some hard decisions if it can’t convince lenders to refinance or change the conditions of its roughly $377 million in term loans.
The publicly traded Lanham company (NASDAQ: TWOU) said late Monday that there is “substantial doubt about its ability to continue as a going concern” unless it is able raise capital or reduce its debt load within the next 12 months. Its share price — already down some 90% over the past year — plunged further on the news and was trading at just 53 cents midday Tuesday.
Under new CEO Paul Lalljie — who took over from co-founder and longtime CEO Chip Paucek in November — 2U is in the process of putting together a cost-cutting plan to present to its creditors that it hopes will convince them to extend its time to pay back its loans. Seeking bankruptcy protection would be an option if it is unable to do so.
“My leadership team has heard me say repeatedly — we’ll be doing a lot of things differently,” Lalljie told analysts and investors during a fourth-quarter earnings call with analysts after markets closed Monday.
