Thai billionaire Charoen Sirivadhanabhakdi’s Singapore real estate company Frasers Centrepoint Limited (FCL) could raise as much as US$358 million by listing a Hospitality Industry Trust business in Singapore.
The deal size is slightly below an earlier estimate of as much as US$480 million for the Initial Public Offering (IPO), made before Frasers Hospitality Trust (FHT) began pre-marketing last week. The Trust comprises 6 serviced residences controlled by FCL and 6 hotels such as Singapore’s InterContinental Hotel, owned by Charoen’s TCC group.
FCL indicated to investors the newly listed firm will have a market capitalisation of between $1.02 billion to $1.12 billion. The parent plans to sell 30% to 40% stake of FHT to investors, raising up to US$358 million. The details of the deal are not made public yet. The sale could be formally launched as early as next week. A formal indicative range is yet to be disclosed, but source said FHT could offer an indicative dividend yield of 6.5% to 7.5%.
The listing would mark the first step in merging the property assets of Charoen’s business empire, comprising Singapore listed FCL and his Bangkok-based TCC Group, after the Thai tycoon won control of the drinks and property conglomerate Fraser and Neave (F&N) in an US$11 billion deal last year.
This IPO with an indicative dividend yield of 6.5% to 7.5% is an attractive investment for income investors. Details of the dividend yield had to be confirmed once the deal are finalised. They might only offered 6.5% to 7.5% yield for the 1st and 2nd year after launch of IPO, subsequently had to depend on market conditions.
