By Rujun Shen
SINGAPORE May 27 Singapore Press Holdings Ltd (SPH) aims to make S$1.048 billion ($829 million) by selling part of a real estate investment trust (REIT) whose assets are two shopping malls, in what could be the city-state's third-biggest IPO this year.
The company plans to sell 30 percent of SPH REIT, giving investors part-ownership of the Paragon shopping mall in Singapore's prime Orchard shopping district and Clement Mall in a western suburb.
The two malls are valued at S$3.07 billion and the listing is scheduled for July.
"SPH believes that SPH REIT will serve as an efficient platform for the holding of investment properties which SPH may divest in the future," CEO Alan Chan told a news conference.
SPH said the IPO would result in the firm booking net cash of around S$1.048 billion. This will involve receiving S$540 million from the sale of units in SPH REIT and the transfer of S$900 million in debt to the REIT, offset by payment of around S$361.2 million to non-controlling shareholders in the properties.
Following the listing, SPH's net debt-to-equity ratio will fall to 9.3 percent from 40.6 percent.
The firm, which has a near-monopoly in newspaper publishing in Singapore, plans to distribute 18 Singapore cents a share as a special dividend to shareholders after the listing, it said in a statement.
Singapore has seen strong demand for REITs and business trusts as investors search for higher yields in a low-interest rate environment.
Mapletree Greater China Commercial Trust, a trust backed by Singapore state investor Temasek Holdings Pte Ltd, raised $1.3 billion in February in Singapore's biggest IPO so far this year.
This was followed by Asian Pay Television Trust (APTT), which owns TBC Group, Taiwan's third-largest cable TV operator, which raised $1.14 billion earlier this month.
Credit Suisse, DBS and Oversea-Chinese Banking Corp are joint bookrunners for the SPH REIT, IFR, a Thomson Reuters publication, reported earlier.
($1 = 1.2644 Singapore dollars) (Writing by Saeed Azhar; Editing by Tom Pfeiffer)