China's Biggest English Teaching Firm Eyes USD195 Million in Hong Kong Spinoff
Xu Wei
/SOURCE : yicai
China's Biggest English Teaching Firm Eyes USD195 Million in Hong Kong Spinoff

(Yicai Global) March 15 -- Koolearn Technology Holding, a unit under China's largest English training center operator New Oriental Education & Technology Group, hopes to raise between HKD1.5 billion (USD195 million) and HKD1.8 billion through an initial public offering in Hong Kong.

The Beijing-based subsidiary, which offers online courses from pre-school to college level, signed on Morgan Stanley, CitiBank and China International Capital as sponsors yesterday, Securities Daily cited the company as saying.

It will issue 164.5 million shares total, and plans to allocate about 148 million to international investors at an offer price of between HKD9.3 (USD1.18) and HKD11.1 apiece. The firm hopes to begin trading on Hong Kong's main board on March 28.

In the six months ending Nov. 30, Koolearn made a net profit of CNY36.2 million (USD5.4 million) -- down nearly 60 percent from the previous half-year as rising sales and marketing expenses weighed on margins, according to its prospectus. Revenue soared 45.4 percent to CNY478 million.

Some 30 percent of the money raised will go toward new hires and employee training, the firm said. Another 30 percent will go toward acquisitions and business growth, and 10 percent each will go to content supply and course development, sales and marketing, technical infrastructure and working capital.

Beijing-based New Oriental is Koolearn's biggest shareholder with more than 66.7 percent holding, followed by tech titan Tencent Holdings, which owns over 12 percent. The parent's employee stock ownership platform Auspicious is the third-largest, with 7.11 percent.

Editor: James Boynton

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Keywords: IPO , Hong Kong , Koolearn , Education