Jun 10, 2014

    Frasers Hospitality Trust's IPO could raise $448m

    THAI billionaire Charoen Sirivadhanabhakdi's Frasers Centrepoint Limited (FCL) could raise as much as $448 million by listing a hospitality industry trust in Singapore, two people with direct knowledge of the matter said.

    The size of the deal is slightly below an earlier estimate of as much as US$480 million ($600 million) for the initial public offering, made before Frasers Hospitality Trust (FHT) began pre-marketing last week.

    The trust comprises six serviced residences controlled by the real-estate company, and six hotels - including Singapore's InterContinental hotel - owned by Mr Charoen's TCC Group.

    FCL indicated to investors that the newly listed firm will have a market capitalisation of between $1.02 billion and $1.12 billion, one of the sources told Reuters. The parent plans to sell a 30 per cent to 40 per cent stake of FHT to investors, both sources said.

    They did not want to be identified because the details of the deal are not public.

    The sale could be formally launched as early as next week, they said. A formal indicative range has yet to be disclosed, but one source said FHT could offer an indicative dividend yield of 6.5 per cent to 7.5 per cent.

    A spokesman for FCL declined to comment.

    The listing would mark the first step in merging the property assets of Mr Charoen's business empire, comprising Singapore-listed FCL and his Bangkok-based TCC Group, after the Thai tycoon won control of drinks-and-property conglomerate Fraser and Neave in a US$11 billion deal last year.

    Banks DBS, HSBC, Morgan Stanley, Standard Chartered and United Overseas Bank are advisers on the deal, the sources said.