National Education discloses use of IPO proceeds

The National Company for Learning & Education (NCLE) announced the use of its initial public offering (IPO) proceeds until the end of May 2020, according to a bourse filing on Thursday.

The gross proceeds of the IPO recorded SAR 247 million, while net proceeds stood at SAR 230.99 million after deducting IPO related expenses and fees of around SAR 16.01 million.

The IPO proceeds are allocated as follows:

1) An amount of SAR 59.6 million was allocated to finance and build an educational complex in Buraidah, Qassim.

2) An amount of SAR 51.99 million was allocated to fund the construction and operation of Tilal Al-Doha Educational campus in Dhahran City, Eastern Province.

3) An amount of SAR 66.7 million was allocated to fund the acquisition of Al-Ghad National Schools Company Limited and Al-Khawarzmi Education Company.

4) An amount of SAR 42.7 million to fund the construction, equipping, furnishing and operation of Al-Qairawan Educational campus in Riyadh City.

The company indicated that the variance of the actual usage of IPO proceeds compared with what has been disclosed in the IPO prospectus and previous announcements was as follows:

1) An amount of SAR 59.6 million was allocated up to Feb. 29, 2020 to fund the construction and operation of Al-Qassim Educational campus in Buraidah City, Qassim Province. An amount of SAR 45.69 million was used as of May 31, 2020 while the remaining allocated amount was not used as per the IPO prospectus due to natural operational circumstances during the commencement of the campus operation by gradually opening the educational levels which led to equip, furnish and operate the campus on different stages based on the actual needs.

In August 2019, NCLE announced the opening and operation of the KG and early elementary stages starting from the academic year 2019-2020, which was opened one year in advance for

KG and early elementary stages compared to the original plan as disclosed in the IPO prospectus.

2) The total amount of SAR 51.99 million was allocated up to May 31, 2020 to fund the construction and operation of Tilal Al-Doha Educational campus in Dhahran City, Eastern Province. An amount of SAR 12.8 million was used during the period while the remaining amount was not used due to the delay in issuance licenses from the relevant authorities which led to the delay in starting the construction.

The variances have no financial material impact on the current fiscal period and NCLE will announce any material update on this matter in due time, the statement said.

The company also noted that the board of directors decided to commence the operation of the campus starting from the academic year 2021-2022 instead of 2020-2021 academic year.

NCLE added that an amount of SAR 66.7 million was allocated to fund the acquisition of Al-Ghad National Schools Company Limited and Al-Khawarzmi Education Company. The total amount was used as of May 31, 2020 and the transactions were completed as per the applicable regular procedures.

In addition, an amount of SAR 37.7 million from the SAR 42.7 million allocated for funding the construction, equipping, furnishing and operation of Al-Qairawan Educational campus in Riyadh City, was used as of May 31, 2020.