ARA US Hospitality Trust seeks to raise US$451 million in Singapore IPO

ARA US Hospitality Trust launched an initial public offering in Singapore on Thursday to raise about US$451 million, for what would be the first new mainboard listing on the local bourse this year.

The trust, which owns a portfolio of 38 US hotels, has set an offer price of 88 cents apiece, according to the float prospectus.

It has secured commitments for US$116.5 million worth of the shares on offer from six cornerstone investors including Celine Tang, who is the managing director at property firm SingHaiyi Group, her husband, Singaporean businessman Tang Gordon, as well as DBS Bank Ltd, Credit Suisse AG, United Overseas Bank Ltd on behalf of their clients.

Trading is expected to begin on May 9, the prospectus said.

Singapore has become a global listing hub for business trusts and real estate investment trusts in the last couple of years, but faces tough competition from Hong Kong and Southeast Asian exchanges to attract companies from other sectors to list in the city-state.

DBS Bank is the sole issue manager for the offering, and is also one of the the joint financial advisers along with Oversea-Chinese Banking Corp Ltd and United Overseas Bank Ltd.

Credit Suisse joins the three banks as a joint bookrunner in the offering.

The trust’s sponsor is an indirect wholly-owned subsidiary of ARA Asset Management Ltd, which has gross assets under management of about S$80.1 billion (US$59 billion).

ARA will own 9.5 per cent of the US Hospitality Trust’s shares on issue upon listing.

Source: Channel NewsAsia – 2 May 2019

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