Why EDU Holdings Is Choosing to Exit the ASX Amid Student Market Turmoil

Background and Rationale

EDU Holdings Limited, a player in the international education sector, has announced its intention to voluntarily delist from the Australian Securities Exchange (ASX). The decision follows a sustained period of low trading volumes and heightened regulatory uncertainty impacting the company’s core revenue stream, international student enrolments, which represent approximately 85% of its income.

The Board highlights that the company’s shares have experienced limited liquidity, with average daily volumes equating to just 0.03% of total issued capital over the past six months. This illiquidity has hampered shareholders’ ability to trade shares at fair value and has contributed to price volatility.

Regulatory Headwinds in International Education

Regulatory challenges loom large for EDU. The Australian Government’s proposed Education Services for Overseas Students Amendment Bill 2024, which includes a significant cap on international student commencements, threatens to reduce EDU’s intake by nearly 78% compared to 2024 levels. Although the bill has not yet passed, the government has already introduced Ministerial Direction 111, prioritizing visa processing for certain providers and effectively slowing others.

These changes, alongside increased visa fees and stricter eligibility criteria, have already led to a marked decline in visa grants, particularly in the Vocational Education and Training sector. The Board anticipates that this regulatory environment will continue to suppress demand and deter new investors, further exacerbating share illiquidity.

Financial and Operational Implications

Maintaining an ASX listing entails ongoing costs and administrative burdens. EDU estimates annual savings of approximately $250,000 in listing fees, audit, insurance, and legal expenses if delisted. More importantly, management time currently devoted to regulatory compliance and reporting could be redirected towards core business operations during this period of uncertainty.

To facilitate shareholder liquidity post-delisting, EDU proposes an equal access off-market buy-back of up to 75 million shares, around half of the company’s issued capital, at a price of A$0.165 per share. This price represents a premium of nearly 27% over the recent closing price, reflecting the Board’s effort to balance the interests of shareholders wishing to exit and those intending to remain invested.

Next Steps and Shareholder Considerations

The delisting and buy-back proposals will be put to shareholders at a general meeting scheduled for 23 June 2025. If approved, shares will continue trading on the ASX for at least one month thereafter, with delisting expected by 6 August 2025, subject to ASX approval and compliance with listing rule conditions.

Post-delisting, shares will only be transferable via private transactions, which may pose challenges for shareholders seeking to sell. The buy-back thus offers a structured exit mechanism. Shareholders will retain protections under the Corporations Act, but the company will no longer be subject to ASX continuous disclosure requirements.

Directors collectively hold 46.2% of shares, with some associated shareholders indicating they will not participate in the buy-back, potentially leaving ample capacity for other shareholders to tender shares.