Wednesday, July 11, 2012

Ascendas Hospitality opens doors to IPO of up to $823 million

Business Times: Tue, Jul 10

PROPERTY manager Ascendas will spin off its hospitality arm in an up to $823 million initial public offering that would be Singapore's largest IPO so far this year.

Ascendas Hospitality Trust plans to offer between 506.1 million and 529.6 million stapled securities at 88 to 94 cents, according to a preliminary prospectus lodged yesterday.

Each inseparable, stapled security will comprise one unit of Ascendas Hospitality Trust, a Singapore- based hospitality Reit (real estate investment trust); and one unit of Ascendas Hospitality Business Trust, a hospitality Reit that also operates and manages the assets held by itself and by A-HREIT.

The distribution between the placement and public tranches has not been set, but 14 million securities will be reserved for subscription by staff.

The joint global coordinators are Nomura and Standard Chartered. Joining as lead underwriters are HSBC and DBS. Also involved are Credit Suisse, CIMB Securities, Maybank Kim Eng and UOB Kay Hian. The dealers have an overallotment option to sell another 80.2 million to 83.4 million securities.

Ascendas Land International, as the sponsor of A-HTrust, will also subscribe to another 266 million to 284.1 million securities. Assuming the maximum price, Ascendas Land will hold a 30.4 per cent stake in A-HTrust following the IPO.

Separate but concurrent with the IPO, AHDF Pte Ltd, a wholly owned unit of Accor Asia Pacific - which will be both a cornerstone investor as well as a strategic partner - will receive between 53.2 million and 56.8 million of securities as partial consideration for the assets held in Ascendas Australia Hotel Fund. AHDF's stake will eventually be 6.1 per cent if the IPO prices at the top indication.

Cornerstone investors, including Lianhe Investments - a wholly owned subsidiary of Singapore Press Holdings, which also owns BT - and Splendid Asia Macro Fund, will also separately subscribe to an additional 80 million to 85.2 million securities. If the IPO prices at maximum guidance, Lianhe's stake will be 1.8 per cent, while Splendid's will be 1.2 per cent. Proceeds will be used to purchase the initial assets, pay debt and fund working capital.

A-HTrust will initially hold 11 properties with 3,803 rooms and a total valuation of about $1.175 billion. The initial portfolio will comprise Ibis Beijing Sanyuan, Novotel Beijing Sanyuan, Ariake Sunroute, Pullman Ambassador Changwon City and all of Ascendas Australia Hotel Fund. Ascendas Australia Hotel owns Courtyard by Marriott North Ryde, Pullman Sydney Hyde Park, Citigate Central Sydney, Sebel Parramatta, Sebel & Citigate Albert Park, Sebel & Citigate King George Square and Sebel Cairns Hotel.

A-HTrust plans to distribute all of its distributable income until March 31, 2014, and at least 90 per cent thereafter. The trust forecast an annualised distribution yield of 7.4 per cent for the year ending March 2013, and 7.7 per cent for the year ending March 2014, assuming the maximum offering price.

The predicted distributable income for fiscal 2013 is $35.3 million, and $62.2 million for fiscal 2014.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G) | | | |

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