Benzinga | Oct 28, 2020 05:21AM EDT

New Oriental Education Launches Hong Kong IPO

New Oriental Education & Technology Group Inc. (the "Company" or "New Oriental") (NYSE:EDU) today announced the launch of its Hong Kong Public Offering, which forms part of the Global Offering (the "Offering") of 8,510,000 new common shares (the "Offer Shares" or "Shares") and listing of its common shares on the Main Board of The Stock Exchange of Hong Kong Limited (the "SEHK") under the stock code "9901."

The Company's American depositary shares ("ADSs"), each representing one common share of the Company, will continue to be listed and traded on the New York Stock Exchange ("NYSE"). Investors in the Offering will only be able to purchase common shares and will not be able to take delivery of ADSs. Upon listing, the Hong Kong-listed shares will be fully fungible with the ADSs listed on NYSE.

The Offering initially comprises 510,600 new Shares under the Hong Kong Public Offering and 7,999,400 new Shares for the International Offering, representing approximately 6.0% and 94.0% of the total number of Shares in the Offering, respectively, subject to re-allocation and over-allotment option. Subject to the level of any oversubscription in the Hong Kong Public Offering and pursuant to the clawback mechanism as described in the prospectus issued in Hong Kong, the total number of shares available under the Hong Kong Public Offering could be adjusted to up to a maximum of 2,042,400 new Shares, representing 24.0% of the Offer Shares initially available under the Offering. In addition, the Company expects to grant the international underwriters an over-allotment option to require the Company to issue up to an additional 1,276,500 new Shares in the International Offering, representing not more than 15.0% of the Offer Shares initially available under the Offering.

The offer price for the Hong Kong Public Offering (the "Hong Kong Offer Price") will be not more than HK$1,399.00 per Share (the "Maximum Offer Price"). The offer price for the International Offering tranche of the Offering (the "International Offer Price") may be set at a level higher than the Hong Kong Offer Price. The Company will set the International Offer Price on or about November 3, 2020 Hong Kong time by making reference to, among other factors, the closing price of the ADSs on the NYSE on the last trading day on or before November 2, 2020 and investor demand during the marketing process. The final Hong Kong Offer Price will be set at the lower of the final International Offer Price and the Maximum Offer Price of HK$1,399.00 per Share. Shares will be traded in board lots of 10 Shares.

The Company plans to use the net proceeds from the Offering for investments in technologies to enhance students' learning experience, its business growth and geographic expansion, strategic investments and acquisitions, and general corporate purposes and working capital needs.