New Oriental Seeks Up to $1.54 Billion in Hong Kong Listing

(Bloomberg) -- New Oriental Education & Technology Group Inc., a Chinese tutoring, test preparation and private school operator, is looking to raise as much as HK$11.9 billion ($1.54 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% over Tuesday’s closing price of $168.81 for its American Depositary Shares. One ADS represents 1 ordinary share.

New Oriental is part of a trend of U.S.-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 U.S. threatening to delist Chinese companies on the grounds American regulators don’t have access to their audit papers.

More than $15 billion has been raised this year through such second listings in Hong Kong, including the blockbuster deals of e-commerce giant JD.com Inc. and NetEase Inc., China’s second largest gaming company. This week, U.S.-listed data center company GDS Holdings Ltd. completed its Hong Kong share sale of $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. Trading is slated to start on Nov. 9.

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

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