Asset Summary

Asset Code EN-HK-SH-EDUC-2018-001
Asset Description 30% Shareholdings of OBOR Education Holdings Limited, with profit sharing agreement of net business profits proportional to shareholdings percentage, on a quarterly basis.
Category Education
Type Shareholder – Profit Sharing
Validity Ongoing without Expiry / Maturity

Asset Code Format:

  • Category Code: EN for energy, IN for infrastructure, UT for utilities and amenities, IT for internet related, TG for new technologies and technological applications, ED for education and CL for cultural.
  • Country Code: 2 letters, the internationally recognized country code.
  • Asset Type: SH for shareholdings, DO for direct ownership, PS for profit sharing agreement, LN for loans and debt, PD for financial product.
  • Asset Name: 4 letters assigned to asset, which is unique to this code only.

 

Background and Market

OBOR projects are open to all countries beyond the 65 developing nations along the 6 economic corridors. It will have an impact on a population of about 4.4 billion and one third of the global economy.

Amidst the hype on the Belt and Road initiative there is not much information for the public as to how to get involved in this initiative. Bulk of prosperity generally goes to the first mover before other entrants to the market. Therefore, we believe that companies and individual are eager to obtain first-hand information pertaining to OBOR with regards to business opportunities.

OBOR Education Holdings Limited was incorporated in Hong Kong by a team of academic professionals with extensive experience and background in the field of international commerce and research. OBOR Education Holdings Limited aims to raise awareness of the One Belt-One Road initiative in the Asian Region and to share the opportunities offered by this initiative to China companies and stakeholders. OBOR Education Holdings Limited operation center is currently located in in Beijing – the central brain of OBOR where planning and policies making are taking place. The company has fostered strong partnership with chamber of commerce in countries along the OBOR region.

 

Investment and ROI

Cirro Capital Limited has made a direct investment of USD 4,110,000, for the acquisition of a 30% stake of OBOR Education Holdings Limited. The investment is based on the following terms:

Amount USD 4,110,000
(Total valuation = USD 13,7000,000)
Shareholdings 30%
Business Description An education services company incorporated in Hong Kong SAR, with the following business functions
- OBOR Edu Mobile App and In-App Purchases
- OBOR Edu Business Ambassador Course
- Project Bridging in the OBOR region
Annual Revenue Est USD 13,112,857 (As of April 2018)
Annual Profit Est USD 9,179,000 (As of April 2018), 70% of revenue
Annual Investment ROI Est USD 2,753,700 (As of April 2018)
Annual Investment ROI Rate (%) 67.0%

 

Exit Strategy

Given the extreme lack of business information and the increasing volume of business investments flowing into the OBOR region, coming from various Chinese business entities, we expect the demand for educational services to increase over the next few years.

The business provides Cirro with a channel to garner both local resources at the OBOR regions as well as entities with financial capabilities to perform FDIs towards these regions. We expect this business to function as a stepping stone to allow us to find high-potential investments in future.

In the longer term, we expect to sell-out the application via capital markets as its user base and revenues mature, as part of our investment exit strategy.