CES Education (China) will hold 60% of the equity interest in Jiduohao Education, while Dongguan Duowei will hold the remaining 40%. Jiduohao Education will be a subsidiary of Chip Eng Seng upon its incorporation.
The primary business of Jiduohao Education will be to provide management and consultancy services to schools which will operate under the “Invictus” brand.
The schools may be established and owned by third parties, or Chip Eng Seng’s subsidiary.
The company’s subsidiary, Invictus International School is the owner of the Invictus brand and related trademarks.
Under the agreement, Invictus International, CES Education, Jiduohao Education will enter into a series of licensing agreements for Jiduohao to have exclusive rights within certain specified territories in China to use and further license the Invictus brand and related trademarks.
Jiduohao will also enter into an exclusive management and consultancy agreement with the relevant schools in relation to its appointment as the manager and operator of such school, for a management fee.
On March 17, CES Education loaned $4.9 million to Dongguan Duowei as part of a larger potential investment which it was exploring with the Duowei Group at the time.
Chip Eng Seng says the entry into the joint venture is not expected to have a significant impact on the net tangible assets and earnings per share of the company for the current FY ending December 31.
Shares in Chip Eng Seng closed 0.5 cent lower, or 1.1% down at 46 cents on August 26.
