On Dec.1 2021, RISE Education Cayman Ltd ("RISE" or the "Company") (NASDAQ: REDU), a leading after-school English teaching and tutoring service provider in China, announced the Sale of three subsidiaries: Rise (Tianjin) Education Information Consulting Co., Ltd ("WFOE"), RISE Education International Limited("RISE HK"), and Rise IP)Cayman) Limited ("Rise IP"). According to the press release, the Buyer SPV is Wuhan Xinsili Culture Development Co., Ltd, which is a newly formed limited liability company controlled by the buyer consortium (the Buyer Consortium") consisting of certain franchisees of the Company and an affiliate of the Company's senior management, who are PRC nationals.
On July 24, 2021, the General Office of the Central Committee of China's Communist Party and the General Office of the State Council jointly released the Opinions on Further Reducing the Burden of Homework and Off-Campus Training for Compulsory Education Students (the "Opinions"), indicating that,
All "subject-based" training institutions are prohibited from conducting IPO or otherwise raising funds from capital markets.
Foreign capital is not allowed to hold or participate in academic training institutions through mergers and acquisitions, entrusted operations, franchise chains, and the use of variable interest entities.
After completing the Sale, the company's domestic entities will be all owned by domestic capital, separating its domestic business from listed companies and foreign capital.
As of Dec.1, 2021, RISE's stock price closed at USD0.62, up 5.37%.