Ascendas Hospitality Trust has launched an initial public offering that could raise up to S$573 million ($450 million), sources said yesterday.
The company launched the deal on Monday night and the roadshow started yesterday in Singapore before moving to Hong Kong in the latter part of the week, one of the sources said. The listing is scheduled for July 26.
Ascendas Hospitality, which owns hotels in Australia and several Asian markets, including China, was initially aiming to raise between $600 million and $700 million after starting pre-marketing in early May. But the company decided later that month to postpone the launch of a formal institutional roadshow due to challenging market conditions, though it was to remain flexible about the timing of the deal, sources said at the time.
The company secured its return with three cornerstone investors, which will take up a total of S$75 million of the deal. The cornerstone investors are: Accor Asia Pacific, a hotel management company, which has committed S$50 million; a unit of Singapore Press Holdings, which is set to pay S$15 million; and Charlie Chan Capital Partners, which is taking S$10 million, the sources said.
Ascendas Hospitality is now selling up to 609.4 million units for a price ranging between S$0.88 and S$0.94 per stapled unit. The offering size includes the cornerstone tranche and represents up to 69.6% of the free float, one source said. The total shares outstanding after the IPO will be 875.4 million units. The sponsor, Ascendas Land International, is taking 265.9 million units, but those shares are not part of the offering, the person said.
The stapled securities consist of one unit in Ascendas Hospitality Real Estate Investment Trust and one unit in Ascendas Hospitality Business Trust, and the units are stapled together and cannot be issued, transferred, traded or dealt with separately, according to the prospectus.
The price range translates into a distribution yield of between 7.4% and 7.8% for March 2013, and between 7.7% and 8% for March 2014, according to the sources.
That compares with its major comparables CDL Hospitality Trust, which will offer a yield of about 6.2% to 6.4% for 2013, and Ascott Residence Trust, which has a yield of about 7.5% for 2013.
As for the breakdown of the deal, the cornerstones will take about 80 million units at the top of the price range, while the institutional tranche will be about 409 million units, the reserved tranche will comprise 14 million units and the retail offering 106.3 million units, one source said.
The institutional book is expected to close on Friday (July 13), when the pricing is to be set. The Singapore public offering period is expected to run from July 16 to 23.
The company plans to use part of the proceeds to refinance debt from past acquisitions, as well as for working capital, according to the prospectus.
Nomura and Standard Chartered are joint global coordinators for the deal, while DBS and HSBC are joining them as bookrunners.
The Ascendas Group has its presence in 10 countries, including Singapore, China, India, South Korea, Australia and some Asean countries, according to the prospectus. It manages a portfolio in excess of 4.96 million square metres as of March 31, 2012, and has grown its assets under management from about S$1.73 billion as at March 31, 2002 to more than S$12.9 billion as at March 31, 2012, it says.
