Raffles Education swaps 49% equity in subsidiaries

Equity was transferred from Hebei Oriental to Langfang Development Zone.

In an SGX release, the Board of Directors of Raffles Education Corporation Limited refers to the Company's announcement dated 23 July 2012 relating to the Framework Agreement executed by Hebei Oriental Zhuyun Property Development Co., Ltd., Langfang Development Zone Oriental University City Sino-Singapore Education Investment Co., Ltd. and Mr Liu Yanwen on 20 July 2012 relating to the setting up of a degree education college through Langfang Oriental Institute of Technology.

The Board wishes to announce that pursuant to the said Framework Agreement, ZY has entered into an equity transfer agreement with LYW and a company owned by LYW, Langfang Development Zone Sino-Singapore Enterprise Management Co., Ltd, for the effective transfer to Management Co of 49% of its equity interest in ZX, in consideration of the transfer by LYW of his 10% shareholding in each of Oriental University City Higher Education Limited, Oriental University City Education Development (H.K.) Limited, Oriental University City Education Consultancy (H.K.) Limited (collectively the "Hong Kong Companies") to a related party of ZY and subsidiary of the Company, Oriental University City Limited, a company incorporated in Cayman Islands ("OUC"), (collectively, the "Equity Swap Arrangement").

Pursuant to the Equity Transfer Agreement, ZX will be converted into a joint venture company with Beijing Tianhairong Education Consultancy Co., Ltd, a nominee of ZY ("ZY Nominee"), and Management Co, a company owned by LYW, as its shareholders, with effective equity interests of 51% and 49% respectively.