ABC, Morgan Stanley discuss assets sale

The boss of troubled ABC Learning Centres Ltd is trying to hammer out the sale of part of ABC's US assets with Morgan Stanley Private Equity in the United States, ahead of the expiry of an exclusivity period with the investment house.

ABC chief executive Eddy Groves is negotiating terms the sale of 60 per cent of ABC's US assets to Morgan Stanley Private Equity.

The world's largest childcare provider entered a memorandum of understanding with the firm, which is due to expire at midnight, New York time, March 24, earlier this month.

"Basically, discussions are continuing and both sides are working furiously to try to get it done," a spokesperson for ABC told AAP.

"It will happen when it happens. It is a complicated set of negotiations, so it will take as long as it takes and (ABC) will come to the market when there is an announcement to make."

The rescue package puts a value of $US775 million ($A856.26 million) on the entire US business.

The transaction will result in cash proceeds of about $A750 million, with an additional $US30 million ($A32.9 million) payable after June 30, 2009.

ABC is expected to use the proceeds as well as the issue of convertible notes to help pay down much of its mature debt.

ABC requires the consent of the majority of its banks to proceed with the sale transaction.

With the lapse of the exclusivity agreement, ABC would be free to talk to other parties.

ABC would not confirm or deny whether it was talking to other parties about the sale of the assets, but said it was firmly "focused on completing a successful deal with Morgan Stanley."

Mr Groves, his wife Le Neve Groves and two other directors were forced to sell about $52 million in stock last month as a result of margin calls, as investors routed their stock.

After putting the shares in a trading halt on February 27, Mr Groves flew to the US to stitch up the deal.

But investors stripped more than 18 per cent off the value of ABC shares when they resumed trading on March 6.

ABC had reported a 42 per cent fall in first half profit to $37.1 million just days before.

The second round of selling has left Mr Groves with only 3,186 shares in the company that grew from a single Brisbane centre 20 years ago.

ABC's share price ended 4.5 cents, or 3.46 per cent, higher at $1.345 on Tuesday.

However, that is still about 23 per cent lower than its closing value on March 6.