SEC: School IPOs face regulatory snag

Education businesses can submit an initial public offering (IPO) filing to the Securities and Exchange Commission, but they will have to seek guidance from the regulator overseeing education as to whether such a move complies with education regulations, the SEC says.

“[IPO] filings received by the SEC are a different process from approving [whether an education operator is allowed to be listed on the bourse],” said SEC secretary-general Rapee Sucharitakul. “Filings uploaded on the SEC website involve a process of information disclosure.

“Normally, the company and its financial adviser would say that [an IPO] can be done, but the decision-maker of this issue is the regulator [responsible for overseeing this type of business],” he said. “If the regulator says that such an IPO cannot be done, then the filing has to be halted because the SEC cannot overrule [the authority] of that regulator.”

Asked about how education businesses have been allowed to list on stock exchanges in Britain, Australia, Hong Kong and Singapore, Mr Rapee responded that each country has its own culture and norms.

He noted that some countries have allowed companies involved with alcoholic drinks and gambling to list on their bourses.

“We [the SEC] do not specify which type of business is not allowed to be listed,” Mr Rapee said. “This is up to the associated regulators as to whether they would permit [an IPO listing] or not.”

SISB Co Ltd, the manager of Singapore International School in Thailand, expects to become the first education business to list on the Stock Exchange of Thailand (SET) this year, with an IPO of 260 million shares.

The IPO funds will be used as working capital to increase education quality and facilitate loan repayment, according to SISB chief executive Kelvin Koh.

SISB will place 260 million shares or 27.66% of total registered shares for the IPO, comprising 26 million shares for directors and employees and 234 million shares for the public.

The IPO price has yet to be disclosed after the filing was submitted last Wednesday, said Somphop Keerasuntonpong, managing director of Finansia Syrus Securities.

SET executive vice-president Amnouy Jiramahapoka said targeted customers of SISB are those in the premium group who have the ability to pay high tuition fees for their offspring.

Listing on the bourse would generate additional cash flows for the school to expand its business on a regional basis, Mr Amnouy said.

“Looking on the bright side, [listing on the SET] would induce the business to lower costs, but it depends on the SEC as to whether the financial regulator would allow such a listing or not,” he said.

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