Far East Organization set for bumper IPO
16 August 2012
News, Asia, Singapore
Far East Organization, Singapore’s biggest closely held developer, is rumoured to have raised S$656.3 million (US$526 million) in an IPO of a hotel trust, according to a report from Bloomberg on Wednesday (August 15).
Far East Hospitality Trust plans to sell 705.7 million stapled securities at 93 Singapore cents apiece, the top end of a marketed range, three people with knowledge of the matter reportedly said, asking not to be named. The units were offered at US$0.86 to US$0.93, according to a prospectus filed with the Monetary Authority of Singapore earlier this month.
The IPO is the biggest this year in Singapore, said the report, where US$785 million has been raised in similar sales year to date, compared with US$7 billion in the first seven months of 2011, according to data compiled by Bloomberg.
A stapled security allows investors to buy both a trust and a related company. The Far East Hospitality units comprise a real estate investment trust and a business trust, according to the listing prospectus.
Far East Hospitality will initially include 11 properties, according to the offering document. Far East Hospitality forecasts a dividend yield of as much as 6.5% for 2012.
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