New Oriental seeks up to HK$11.9b in Hong Kong listing

[HONG KONG] New Oriental Education & Technology Group, a Chinese tutoring, test preparation and private school operator, is looking to raise as much as HK$11.9 billion (S$2.09 billion) in its second listing in Hong Kong.

New Oriental is selling 8.51 million shares in its offering, according to a company statement on Wednesday. It has set a maximum price of HK$1,399 for the portion of the deal being marketed to Hong Kong's retail investors, which represents a premium of almost 7 per cent over Tuesday's closing price of US$168.81 for its American Depositary Shares (ADS). One ADS represents one ordinary share.

New Oriental is part of a trend of US-listed Chinese firms that are conducting share sales in Hong Kong as a way to broaden their investor base and as a hedge against deteriorating relations between Washington and Beijing. Tensions have spilled over into the capital markets, with the US threatening to delist Chinese companies on the grounds American regulators don't have access to their audit papers.

More than US$15 billion has been raised this year through such second listings in Hong Kong, including the blockbuster deals of e-commerce giant JD.com and NetEase, China's second largest gaming company. This week, US-listed data centre company GDS Holdings completed its Hong Kong share sale of US$1.67 billion.

New Oriental plans to price the Hong Kong shares on Nov 3, according to the statement. It intends to use the proceeds for purposes including investing in technologies to enhance students' learning experience and for business expansion and acquisitions.

Credit Suisse Group, Bank of America and UBS Group are joint sponsors for the offering, according to a preliminary prospectus.

BLOOMBERG