Wednesday, July 11, 2012

Ascendas plans mega SGX listing of hotels

Straits Times: Tue, Jul 10

THE Ascendas group is planning to list its hotel properties on the Singapore Exchange (SGX) in a move that could be one of the biggest listings here this year.

Ascendas wants to raise gross proceeds of as much as $823 million from listing Ascendas Hospitality Trust, which owns 11 hotels in Australia, China, South Korea and Japan. These include the Citigate Central Sydney and Novotel Beijing Sanyuan.

Each of the units - known as 'stapled securities' - will be sold at between 88 cents and 94 cents, according to a preliminary prospectus lodged with the Monetary Authority of Singapore yesterday. There was no indication of the timeline for the listing.

The stapled securities each contain a unit in a business trust and a unit in a real estate investment trust.

They are expected to provide a yield of 7.4 to 7.8 per cent for next year, depending on the final issue price. The yield could be between 7.7 and 8 per cent in 2014.

The pricing suggests Ascendas, which is wholly owned by JTC Corp, could raise $770.3 million to $822.9 million from the listing.

The funds will partly be used to pay acquisition costs of the properties and for working capital.

Ascendas is more well-known for providing business space than hospitality and has built a significant presence in 10 countries, including Singapore, China and India, over 30 years.

The firm said in the prospectus that it 'intends to expand its offerings... beyond business space to include hotels, residences, retail malls and facilities for entertainment and sports'.

Last December, Ascendas joined French hotel group Accor to buy a stake in Mirvac Group's hotel fund. Accor is also a cornerstone investor for Ascendas Hospitality Trust, which means it has pre-agreed to buy some units.

Yesterday's lodging of the prospectus follows a Reuters report in late May suggesting that the Ascendas listing had been called off due to tough market conditions.

But the initial public offering now looks set to go ahead and it, along with the upcoming listing of hospital giant IHH Healthcare, could give Singapore's faltering capital market a shot in the arm.

Only US$4.6 billion (S$5.8 billion) was raised here in the first half of the year, the lowest half-year level since 2005 when just US$4 billion worth of deals were cut, according to Thomson Reuters data.

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