ATA Inc. ("ATA" or the "Company", Nasdaq: ATAI), a
leading provider of advanced testing technologies and
testing-related services in China, today announced that its Board
of Directors has declared a special cash dividend of US$3.00 per
common share, or US$6.00 per American Depositary Share (ADS) in
connection with and conditioned upon the final closing of the sale
of ATA Online (Beijing) Education Technology Co., Ltd. (“ATA
Online”), the Company’s subsidiary that operates the testing
services and delivery business.
The total amount of cash distributed in the
dividend is expected to be approximately US$140 million. The
dividend will be paid on or around August 24, 2018, to all
shareholders of record as of the close of business on August 20,
2018, subject to and conditioned upon the final closing of the sale
of ATA Online (the “Transaction”). The number of weighted average
ADSs used to calculate both basic and diluted earnings per ADS for
the quarter ended March 31, 2018, were 22.9 million. Each ADS
represents two common shares.
Not including this special cash dividend, the
Company has distributed approximately US$1.42 per ADS in dividends
in aggregate as a measure of rewarding shareholders for their
continued support since 2008.
Because the special cash dividend represents
more than 25% of the closing trading price of ATA’s ADSs on August
8, 2018, the Nasdaq Stock Market (the “Nasdaq”) determined that
ATA’s ADSs will trade with “due-bills” representing an assignment
of the right to receive the cash dividend from the day prior to the
record date through the payment date. The ADSs will not trade
ex-dividend until the first business day after the payment date.
Stockholders who sell their ADSs on or before the payment date will
not be entitled to receive the cash dividend.
Due-bills obligate a seller of shares of stock
to deliver the dividend payable on such shares to the buyer. The
due-bill obligations are settled customarily between the brokers
representing the buyers and sellers of the stock. ATA has no
obligation for either the amount of the due-bill or the processing
of the due-bill. Buyers and sellers of ATA’s ADSs should consult
their brokers before trading to be sure they understand the effect
of the Nasdaq’s due-bill procedures.
Mr. Kevin Ma, ATA’s Chairman and CEO, stated,
“We are pleased to announce our Board’s approval of this special
cash dividend, which is conditioned upon the successful completion
of the third closing of the Transaction. We anticipate consummating
the final closing of the Transaction earlier than our original
deadline of late third quarter 2018. We appreciate the ongoing
support of our shareholders as ATA continues to evolve with the
ever-changing education industry in China and are pleased to be in
a position to return capital to our loyal shareholders with this
special dividend. Our Company completed its IPO in January 2008 at
a price of $9.50 per ADS. With the addition of this special
dividend, we will have paid out US$7.42 per ADS back to
shareholders while pursuing acquisition opportunities within the
education sector.”
Transaction UpdateAs previously
announced in a press release on February 6, 2018, ATA entered into
a share purchase agreement (as amended, the “Share Purchase
Agreement”) with a group of investors including two entities
affiliated with funds managed by CDH Investments, a major Chinese
alternative asset management firm based in Beijing; New Beauty
Holdings Limited, a company controlled by Mr. Kevin Xiaofeng Ma,
the Chairman and Chief Executive Officer of ATA; and four holding
companies controlled by certain management members of ATA Online
(collectively, the “Buyer Group”), with respect to the
Transaction.
Under the terms of the Share Purchase Agreement,
the Buyer Group agreed to acquire all of the outstanding equity
interests of ATA Online, which was then held directly or indirectly
by ATA, for a total consideration of US$200.0 million in cash. The
US$200.0 million in cash consideration payable by the Buyer Group
for ATA Online represents an 87.4% premium over ATA’s market
capitalization (calculated based on the closing trading price of
ATA’s ADSs on February 5, 2018). Mr. Ma paid a cash deposit in the
amount of US$20.0 million to ATA as collateral and security for the
payment obligations of the Buyer Group as agreed under the Share
Purchase Agreement. The closing of the Transaction is expected to
take place in three stages and is subject to the satisfaction of
various conditions precedent in the Share Purchase Agreement. The
first of the three closings was completed on April 4, 2018.
As announced in a press release on June 27,
2018, ATA, three of the four holding companies controlled by
certain management members of ATA Online (the “Management Buyers”)
assigned their rights and obligations under the Share Purchase
Agreement to purchase a total of 15% of the equity interests in ATA
Online (the “Assigned Shares”) to Zhuhai Lihonghuaying Equity
Investment Partnership (LP) (the “LHHY Buyer”), a China-based
entity principally engaged in private equity investments. The LHHY
Buyer has purchased 15% of the equity interests in ATA Online in
connection with the consummation of the Transaction’s second
closing on June 27, 2018.
The Company currently expects that the third and
final closing of the Transaction will be completed before the end
of the third quarter of 2018, ahead of original schedule, but the
Company cannot assure that all of the conditions for the third and
final closing of the Transaction will be fulfilled or that the
Transaction will ultimately be completed.
If the Transaction is not completed, ATA will
continue to conduct the ATA Online-related business and may
consider and evaluate other strategic opportunities. In such a
circumstance, there is no assurance that ATA’s continuous operation
of the ATA Online-related business or any alternative strategic
opportunities will result in the same or greater value to
shareholders as with the sale of ATA Online.
The Company also filed Form 6-Ks on February 6,
2018 and June 27, 2018, and a Form 20-F on April 12, 2018,
containing additional information regarding the Transaction, which
investors may access on the SEC Filings page on ATA’s website or on
the U.S. Securities and Exchange Commission website at
www.sec.gov.
About ATA Inc.ATA is a leading provider of
advanced testing technologies in China. The Company offers
comprehensive services for the creation and delivery of assessments
based on its proprietary testing technologies and test delivery
platform. ATA’s testing technologies are used for professional
licensure and certification tests in various industries, including
information technology services, banking, teaching, asset
management, insurance, and accounting. As of March 31, 2018, ATA's
test center network comprised 3,379 authorized test centers located
throughout China. The Company believes that it has the largest test
center network of any commercial testing service provider in
China.
ATA has delivered approximately 101.5 million
billable tests since ATA started operations in 1999. For more
information, please visit ATA’s website at www.atai.net.cn.
Cautionary Note Regarding
Forward-looking StatementsThis announcement contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and as defined in the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terms such as
"believe," "could," "expect," "future," "look forward to," "plan,"
"should," "will," and similar terms. Examples of these
forward-looking statements include the Company’s plan for the
special dividend and the third closing of the Transaction, the
anticipated benefits of the Transaction and the Company’s plan for
and anticipated benefits of other potential acquisitions. These
forward-looking statements involve known and unknown risks and
uncertainties, are based on current expectations, assumptions and
estimates, and are subject to governmental approvals and other
conditions. The Company undertakes no obligation to update
forward-looking statements, except as may be required by law. The
Company cannot assure you that its expectations and assumptions
will turn out to be correct, and investors are cautioned that
actual results may differ materially from the anticipated
results.
For more information on our company, please contact the
following individuals:
At the Company |
Investor
Relations |
ATA Inc. |
The Equity Group
Inc. |
Amy Tung, Chief
Financial Officer |
Carolyne Y. Sohn,
Senior Associate |
+86 10 6518 1122
x5518 |
415-568-2255 |
amytung@atai.net.cn |
csohn@equityny.com |
|
|
|
Katherine Yao, Senior
Associate |
|
+86 10 6587 6435 |
|
kyao@equityny.com |
|
|
|
Adam Prior, Senior Vice
President |
|
212-836-9606 |
|
aprior@equityny.com |
|
|
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