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Educator TAL to Raise $3.3 Billion in Private Placement

Ding Yi / Dec 29, 2020 03:26 PM / Business & Tech

New York-listed Chinese education services provider TAL Education Group is poised to raise $3.3 billion through a private placement, a move that comes as the Covid-19 pandemic has increased the popularity of online learning.

Beijing-based TAL will secure $2.3 billion by selling convertible notes, with the remaining $1 billion to be raised by issuing new class A common shares, the company said in a statement on Monday.

Private equity investor Silver Lake led the convertible notes portion of the placement.

The convertible notes, if fully converted into the company’s American depositary shares (ADSs), and the newly issued class A common shares will account for 4.3% and 2.2% of TAL’s outstanding shares respectively, according to the statement.

Founded in 2003, TAL offers offline and online tutoring services to K-12 students covering a wide range of academic subjects.

During its latest reporting period through August, TAL posted a net profit of $15 million, compared with a net loss of $23.5 million a year earlier, the company said. It attributed the healthy performance largely to the expansion of student enrolment in its paid long-term courses to more than 5.6 million, a year-on-year growth rate of 65%.

Amid strong demand for online education largely as a result of coronavirus-induced lockdowns earlier this year, online tutoring companies have been drawing attention from venture capitalists.

On Monday, Beijing-based online education startup Zuoyebang announced the completion of a $1.6 billion funding. The round came just six months after the company received a $750 million investment from a group of investors including FountainVest Partners and Tiger Global Management.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Chinese Online Tutor Zuoyebang Raises $1.6 Billion in New Funding

 


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