New Oriental Education IPO beats forecast range
NEW YORK, Sept 6 (Reuters) - Despite a tough IPO market, China's New Oriental Education & Technology Group Inc. on Wednesday raised $112.5 million in an initial public offering that priced above expectations, according to an underwriter.
Investors' appetite for risk dwindled in the summer amid inflation concerns and record oil prices, among other factors, and market conditions were cited by many of the 44 companies that delayed IPOs this year -- the highest number since 2001.
New Oriental Education, a provider of foreign language instruction, became the first IPO after a two-week lull by selling 7.5 million American Depositary Shares (ADS) for $15 per ADS, compared with an $11 to $13 forecast. Each ADS represents four common shares.
The sale of about 21 percent of the company indicates an initial market capitalization of $529 million.
New Oriental plans to use the IPO proceeds for working capital, debt repayment and general corporate purposes which may include facility expansion, acquisition of new facilities, and development of new programs and strategic acquisitions, according to a U.S. Securities and Exchange Commission filing.
The company offers services and products mainly for English and other language training and delivers programs through a network of 25 schools, 111 learning centers and 13 bookstores.
The company also has more than 5,000 third-party bookstores, about 1,700 teachers in 24 cities and about 2 million registered online users, according to the SEC filing.
Two-thirds of its revenue is derived from four cities in China -- Beijing, Shanghai, Guangzhou and Wuhan -- each with a population of more than 4 million, the filing said.
The underwriters, led by Credit Suisse and Goldman Sachs (Asia) LLC, have the option to buy 1.1 million more ADS's.
New Oriental Education applied for a New York Stock Exchange listing under the symbol "EDU" (EDU.N: Quote, Profile, Research).
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