China EDU Group

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China Education Group Limited (“CEG” or the “Company”) is the second largest tertiary education group in China which has total student enrollment of over 75,200 and owns and operates three top-ranked private higher education institutes (“HEIs”) located in Jiangxi Province (frontier region) and Guangdong Province. It is one of the earliest private higher education providers in China. CEG stands at the forefront of each stage of the education industry reform. CEG has high initial employment rate of 91% for undergraduate programs and 98% for vocational training programs, as of August 21, 2017, compared with national average of 78%.  CEG is planning for an IPO on the main board of HKSE to further expand its school network.  IFC will provide a financing package comprising (i) an A loan of up to US$45 million; and (ii) a cornerstone investment of US$30 million in straight equity to support the Company’s expansion plan. The company plans to acquire existing schools and set up new schools across China and to operate them (“the project”).  As of August 21, 2017, the three schools have 128 buildings, distributed in JUT with 69, GBU with 26, and BTC with 33, including dormitory buildings mostly built around, and a small number of newer teaching and administrative buildings constructed in as part of campus expansion. Most dormitory and other buildings comprise up to 7 floors with and without elevators. Strict access control is exercised at each male or female only dormitory building. CEG plans to acquire schools to enlarge the Company’s school network. Acquisition criteria entail degree granting institutions located in frontier regions with substantial growth potential for higher enrollment rates or in regions with significant demand for labor market. Approximately 37% of the Project cost will be used for the upgrade and expansion of existing schools, including construction of a new campuses for GBU. As disclosed in the IPO prospectus, the new campuses of GBU are located near to the existing campus and will have a gross site area of approximately 748 acres (parcel of land acquired in 2017) accommodating over 20,000 additional students with half of that to be completed during the first phase, with high-rise dormitory and educational buildings.  The Project will be funded primarily by IPO proceeds as well as the proposed IFC financing package.