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M&L Hospitality Trusts Defers IPO due to Weak Market Conditions


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by Ernie B. Calucag

 

Amid increasing number of companies doing IPOs recently, M&L Hospitality Trusts announced on Friday that it has decided to defer its planned listing and initial public offering in Singapore due to weak market conditions.

The trust’s sponsor, Grandline International Limited, said it has completed the international roadshow with investors since the lodgement of the preliminary prospectus on April 12. However, as the targeted book coverage outcome was not ideal, the sponsor has decided, in consultation with the joint global coordinators and bookrunners, “that it is not in the best interests of both the sponsor and investors to proceed with the proposed initial public offering at this time.”

M&L Hospitality Trusts, which owns hotels in Singapore, Australia and Japan, intended to raise up to S$509.0 million from the IPO. Interest in the trust’s offering, however, came in at the low end of the indicative price range of S$0.80-S$0.87 a unit.

M&L had planned to sell 532.2 million shares, equivalent to 55 per cent of the company capital, with an option to increase that by a further 53.2 million shares.

“We appreciate the positive support received from various institutional investors for our hospitality platform, portfolio and growth strategy. Irrespective of the listing, we remain well capitalised and shall continue to pursue new hospitality acquisitions in Asia Pacific,” said Jocelyn Kum, CEO of MLK Capital Limited, a subsidiary of Grandline International.

In contrast, another hotel operator, Global Premium Hotels, debuted strongly on SGX Thursday, with shares closing at S$0.285 each, 9.6 per cent higher than its initial public offering price of S$0.26.

Global Premium, the hospitality arm of Fragrance Group, said its initial public offering of 450 million new shares at S$0.26 each was 4.7 times oversubscribed.