Singapore headquartered private education provider Raffles Education Corp has received in-principle approval from the Stock Exchange of Hong Kong for listing its subsidiary Oriental University City Holdings.
This is the second major step towards its IPO as the Singapore Exchange had already issued a no-objection letter earlier this month.
Malaysia’s state investment agency Khazanah Nasional is learnt to have around 10 per cent equity in Raffles Education’s Oriental University City (OUC) that owns and leases educational facilities in China’s Langfang city.
Khazanah, which owns this minority stake through its wholly owned subsidiary, Rawa Investments, had paid around S$63 million about three years ago for its equity holdings in the private education provider.
The company had earlier said that the proposed listing would increase the overall financial capacity of the group, allowing it to deploy resources for growth of its core business – provision of education services – and its other strategic businesses. It had also said that the proposed listing would allow the company to free the resources, which were previously reserved for HKCO group and the Langfang Development Zone Oriental University City Education Consultancy Co Ltd and place it in a better financial position.
Raffles Education has said it will maintain majority control of HKCO after the proposed IPO.
Justifying the move to list its subsidiary, the company has also said the proposed spin-off would allow the HKCO Group and the remaining group to cater to their distinct businesses, strategies and growth plans. The company added that investors will have a choice of investing separately, in each distinct business, based on their own assessment of each listed entity and taking into account the distinct strategies, functional exposure, risks and returns.
“Differentiation of the two businesses may also attract new investors who are seeking investment opportunities in one or both of the focused business models, thereby creating a wider and more diverse investment base,” Raffles Education had said in an earlier statement.
The group owns and operates OUC, a self-contained campus of one million square metre in Langfang, Hebei, which is approximately 50 km away from Beijing. The OUC campus provides education services to six other universities and colleges with an additional student population of over 19,000, said the group website.
According to its website, the Raffles Group is one of the largest private education provider in the Asia Pacific region. It owns and manages education assets and facilities, education-linked real estate and development across 12 countries through its network of 30 colleges and universities in 29 cities in countries including, Australia, Cambodia, China, India, Indonesia, Malaysia, Mongolia, Philippines, Saudi Arabia, Singapore, Sri Lanka and Thailand.