November 16, 2016 / 5:02 PM / 2 years ago

UPDATE 2-Brazil's Tarpon seeks investors for $158 mln Somos capital injection - sources

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SAO PAULO, Nov 16 (Reuters) - Brazilian asset manager Tarpon Investimentos SA is looking for investors to inject 500 million reais ($158 million)into its education company Somos Educação SA, two sources with knowledge of the matter told Reuters.

Investment firms such as CVC Capital Partners Ltd 2b Capital SA, controlled by Brazilian lender Banco Bradesco SA , have been contacted by Tarpon, the sources said.

Tarpon holds 76 percent of Somos, which is the largest listed operator of private primary schools and prep courses in Brazil, and sells educational systems.

The investor would inject cash in Somos and get a minority stake, said the sources, who asked not to be identified because they are not authorized to speak publicly on the matter.

Tarpon, CVC and 2b Capital declined to comment. Somos did not respond to requests for comment.

Private primary schools have suffered during Brazil’s two-year recession, the worst since the 1930s, since there is no government financing of primary tuition, unlike private universities.

Brazil’s private schools industry group Fenep estimates a 12 percent drop in the number of students this year, as cash-strapped parents move their children to the generally lower-quality Brazilian public schools.

If Tarpon reaches an agreement with an investor, Somos would use the proceeds to reduce net debt, currently around 1 billion reais, the sources said.

The investment firm acquired control of Somos from Editora Abril SA in 2014, and raised its stake last year.

Since then, Somos sold Central de Produções GWUP, owner of the chain of foreign language schools Wise Up, for 400 million reais, less than half of its acquisition price in 2013.

Somos Educação reported losses in the last two quarters. Common shares in Somos dropped 6 percent after the Reuters report, reversing earlier gains, raising the price drop to 39.5 percent this year. ($1 = 3.1721 reais) (Reporting by Tatiana Bautzer; Editing by Alan Crosby and Chizu Nomiyama)

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