New World starts to market US$700 million Hong Kong hotel spin-off
Firm hopes to raise about US$700 million from the flotation of trust that will initially consist of its three upmarket hotels in city
New World Development has started to market the spin-off of its Hong Kong hotels and plans to list the trust on July 9, people familiar with the situation said.
The trust would acquire more hotels in the future, as New World and its controlling shareholder, Chow Tai Fook Enterprises, owned more than 40 hotels worldwide, one of the people said. She said the firm had 14 hotels in Asia in operation and plans for 13 more.
The initial portfolio would comprise only the hotels in Hong Kong as these have established financial records, the prelisting document said.
The company and Chow Tai Fook have agreed to guarantee a minimum HK$707 million first-year payout from the proposed spin-off. Analysts estimated the yield of the stock would be about 6 per cent in the first year.
The share sale comes after Great Eagle raised US$549 million by listing its hotels through Langham Hospitality Investments last month. The share price of Langham has fallen 12.6 per cent since it debuted on May 30. It rose 0.7 per cent yesterday, closing at HK$4.37.
"Great Eagle's listing experience will affect New World's proposed listing, as both are spinning off their hotels," said Eric Yuen Chi-fung, the head of research at GuocoCapital.
