The move will help the school raise money for its expansion project, which is expected to cost almost HK$100 million. The plan, aimed at increasing facilities for pupils and expected to be completed by 2017, is still subject to approval from various government departments, Koon said.

"We didn't want to charge existing parents for projects built for children in the next several decades, so we decided to issue refundable debentures for our capital fund," Koon said.

The school's expansion plan includes 13 new activity rooms, a lift and an additional floor in the library, among others.

"It's not our intention to increase pupil capacity but to add classrooms to cut class sizes and further provide an optimal learning environment," Koon said.

Companies that buy the corporate debentures would get priority for their staff members' children at the school.

The school issued its first batch of individual debentures - about 50 - last year, but received around 600 applications.

This year, it received about 600 applications for Year One places in the next academic year, but the school would admit only 190 pupils, Koon said. She added that most of the applicants graduated from the school's affiliated kindergarten in Quarry Bay.

Koon said the school would stop issuing the debentures when expansion was completed.

The Victoria Shanghai Academy, which opened in Causeway Bay in 1984, has more than 1,600 pupils. It uses the International Baccalaureate curriculum.

Its parent company, the Victoria Education Organisation, runs eight kindergartens across Hong Kong, four in Shanghai and three in Shenzhen.