(Yicai Global) Sept. 10 -- Koolearn Technology Holding will issue HKD1.8 billion (USD230 million) worth of new shares for the Chinese online tutoring firm's controlling shareholder and chairman.

Koolearn will issue 59.4 million shares, priced at HKD30 (USD3.90) apiece, the Beijing-based company said in a filing with the Hong Kong Stock Exchange yesterday. That represents an 11 percent discount to yesterday's closing price. The new shares equal 6 percent of Koolearn's total share capital after the issuance.

New Oriental will buy 51.7 million units to have a 55.2 percent stake and Tigerstep, controlled by Chairman Yu Minhong, will purchase the remainder to hold 2.4 percent of the total equity, the company added. This is the second time that New Oriental and Yu have increased their holdings since Koolearn went public in March 2019.

The education provider will use 40 percent of the funds to improve its marketing in order to attract more clients, the statement added. A similar sum will go to technical upgrades. Some 10 percent will be used for recruitment and training and the remainder as working capital.

The company has had a good year. New Oriental's K-12 business income increased by 85 percent to CNY295.1 million (USD38 million) in the 2020 fiscal year from a year earlier, according to its earnings report published on Aug. 21. The number of paying students more than tripled to 1.9 million.

Koolearn's stock price [HKG:1797] fell 1.2 percent to HKD33.15 this afternoon.

Editor: Emmi Laine