AP14 History 47951-04P 97..123
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THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. HISTORY AND REORGANIZATION OVERVIEW We are a leading private education service provider in Western China, according to the Frost & Sullivan Report. Our history can be traced back to 2002 when our founder, Mr. Luo, established our first school, Luzhou Tianli School, to provide private education services in the PRC. We primarily offer K-12 educational services supplemented by tutoring services for K-12 students and pre-kindergarten children. Mr. Luo, our founder and chairman and Controlling Shareholder, has accumulated over 15 years of experience in the education sector. Please refer to the section headed ‘‘Directors and Senior Management’’ in this document for further details. We have established a school network consisting of (i) 19 self-owned schools and one early childhood education center which are owned and operated by us, (ii) four entrusted schools to which we provide management services, and (iii) three franchised early childhood education centers to which we have licensed the right to use our brand. As of the Latest Practicable Date, our school network consisted of 12 K-12 schools, which administered four high school programs, six middle school programs, eight elementary school programs and five kindergarten programs, 11 tutoring schools and four early childhood education centers across eight cites in China. For details of our self-owned, entrusted schools and franchised early childhood education centers, see ‘‘Business — Our School Network’’ in this document. A typical self-owned K-12 school generally has a range of campus facilities, including, among others, classrooms, multi-media rooms, laboratories, library, auditoriums, gymnasium, outdoor fields and sport courts, canteen, infirmaries and dormitories. KEY MILESTONES The following is a summary of our Group’s key development milestones: Year Event 2002 . Our first school, Luzhou Tianli School, was established 2009 . Luzhou Longmatan Tianli Elementary School, our first elementary school, was established 2010 . Our first tutoring school, Luzhou Longmatan District Tianli Culture and Arts Tutoring School, was established 2013 . We expanded outside Luzhou through the establishment of Affiliated Kindergarten of Luzhou Tianli School and Yibin Cuiping District Tianli School 2014 . Guangyuan Tianli International School and Neijiang Tianli International School were established 2016 . Xichang Tianli (International) School was established Luzhou Tianli School was recognized as Sichuan Province First-tier Demonstrative School (四川省一級示範學校) by the Sichuan Province Education Department 2017 . Ya’an Tianli School and Cangxi Tianli School were established Please refer to the section headed ‘‘Business — Awards and Recognition’’ in this document for further details of the awards and recognitions received by our schools. – 97 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. HISTORY AND REORGANIZATION HISTORY OF OUR GROUP Early History of our Group before establishment of Tianli Education (2003 to 2013) Establishment of our first schools Mr. Luo, our founder and chairman, together with Liu Ning, Wang Jian and Bao Liangwen (an Independent Third Party), established our Group’s first school, Luzhou Tianli School, on January 22, 2002. Luzhou Tianli School provides middle school and high school programs, primarily for students from Sichuan, Guizhou and Yunnan Provinces and Chongqing City. Subsequently, as our Group continues to develop, Luzhou Longmatan Tianli Elementary School was founded by Mr. Luo, together with Wang Jian, Liu Ning, Liu Dengyan and Tian Mu (Mr. Tian is our non-executive Director) and Sichuan Province Luzhou Senior High School on August 10, 2015. Luzhou Longmatan District Tianli Culture and Arts Tutoring School was founded by Luzhou Tianli School as its sponsor in September 2010, and Yibin Cuiping District Tianli School was founded by Tianli Holding, Mr. Luo, Wang Jian, Liu Ning, Liu Dengyan and Tian Mu on November 7, 2012. School sponsor interests in these three schools were subsequently transferred to Tianli Education, please see ‘‘— History of Our Group — Development of our Group since establishment of Tianli Education (2013 to Present) — Transfer of school sponsor interests in three schools to Tianli Education’’ of this section. Shareholding of Tianli Holding Tianli Holding was established as a PRC limited liability company on April 23, 2004. It has held school sponsor interests in Yibin Cuiping District Tianli School since December 25, 2015, in addition to other business activities including real estate investment. Upon the establishment of Tianli Education, Tianli Holding was held by Sichuan Zhengcheng as to 46.97%, Luzhou Zhongtian Shangye Investment Company Limited as to 25.28%, Chengdu Tianzhan as to 16.91% Luzhou Sanyi as to 8.43% and Luzhou Xuhui as to 2.41%. Mr. Luo, through various layers of corporate entities, has held a controlling interest in Tianli Holding since its incorporation and as at the Latest Practicable Date. In preparation for the [REDACTED], certain share transfers and changes in the share capital of Tianli Holding took place. As a result, Mr. Luo, through Tianli Holding, held a 45.13% controlling interest in Tianli Education, a holding company established with the primary purpose of holding school sponsor interests/equity interests in our PRC Operation Schools, immediately before entering into the Structured Contracts. For details of the shareholding structure of Tianli Holding, please refer to the table set out in ‘‘— Corporate Reorganization — 9. Issuance of Shares to the offshore holding companies’’ below in this section of this document. – 98 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. HISTORY AND REORGANIZATION Development of our Group since establishmentofTianliEducation(2013toPresent) Establishment of Tianli Education On April 19, 2013, Tianli Education was established with a registered capital of RMB10 million contributed by Tianli Holding as to 54%, Mr. Luo as to 19.5%, Wang Jian as to 8.75%, Liu Dengyan as to8.25%,LiuNingasto8.25%andTianMuasto1.25%.TianliEducationwassetupasthekey operating entity to hold certain school sponsor interests in our PRC Operating Schools and equity interests in some of the Group’s intermediate holding companies. Since its establishment, Tianli Education has been controlled by Mr. Luo. From April 2014 to October 2017, there were certain shareholding changes concerning Tianli Education, despite such changes, Mr. Luo has remained the only Controlling Shareholder of Tianli Education. Please refer to ‘‘Statutory and General Information — A. Further Information about our Group — 3. Changes in the share capital or registered capital of our subsidiaries and PRC Operating Entities’’ in Appendix V to this document for further details of the historical changes to Tianli Education’s shareholding and share capital. – 99 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. HISTORY AND REORGANIZATION As of December 15, 2017, immediately before the transfer of shares in Tianli Education by its their shareholders to the Registered Shareholders, the shareholding structure of Tianli Education was as follows: Note: Mr. Luo’s controlling interest in Tianli Education was maintained through his direct shareholding (24.73%) and Tianli Holding (via Sichuan Zhengcheng (24.11%) and Chengdu Tianzhan (8.67%)). – 100 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON THE COVER OF THIS DOCUMENT. HISTORY AND REORGANIZATION Transfer of school sponsor interests in three schools to Tianli Education In 2015, the school sponsor interests in the following schools established by Mr. Luo and/or Luzhou Tianli School were transferred to Tianli Education and Sichuan Province Luzhou Senior High School as set out in the table below: Transferee(s) (percentage of Date of Transfer Schools Transferor(s) sponsor interest) Consideration December 25, Yibin Cuiping 1. Mr. Luo Tianli Education (100%) RMB50 million 2015..... District Tianli 2. Tian Mu (Note: School sponsor School 3. Liu Ning interests were 4. Liu Dengyan subsequently 5. Tianli Holding transferred to Yibin 6. Wang Jian Shenzhou Tianli Education Development Company Limited) August 12, Luzhou Tianli 1. Mr. Luo Tianli Education RMB41.67 million 2015..... School 2. Luzhou Xing (83.34%) Nanyang 3. Luzhou Xinlida 4. Sichuan Kangning 5. Luzhou Xinshun 6. Luzhou Yuanyuan August 10, Luzhou 1. Mr. Luo Tianli Education RMB5.00 million 2015..... Longmatan 2. Luzhou Xing (83.34%) Tianli Nanyang Elementary 3. Sichuan Kangning School 4. Luzhou Xinlida 5. Luzhou Xinshun 6. Luzhou Yuanyuan Continued Development of our Group Subsequent to the establishment of Tianli Education in 2013, we opened 17 self-owned schools including seven K-12 schools and nine tutoring schools and one early childhood education center, which provide education services to K-12 students as well as pre-kindergarten children. Our schools are