August 26, 2013 / 4:12 AM / in 5 years

Thai tycoon Charoen eyes $500 million IPO for F&N REIT: sources

SINGAPORE (Reuters) - Thai billionaire Charoen Sirivadhanabhakdi is looking to raise at least $500 million by listing a hospitality trust in Singapore next year to help refinance some of the debt that his companies took on to win control of Fraser and Neave (F&N) (FRNM.SI), people with knowledge of the matter said.

The real estate investment trust would hold service residences owned by F&N and hotels held by the Thai beer baron’s TCC Assets Ltd such as the InterContinental Hotel in Singapore.

The listing would also mark the first step towards the merging of F&N’s assets and Charoen’s business empire after the Thai tycoon won control of the Singapore drinks-and-property conglomerate early this year in an $11 billion deal. Charoen controls F&N through TCC and Thai Beverage PCL (TBEV.SI).

Two sources said that while the exact size of the IPO has not been decided yet, they expect it would raise at least $500 million and be conducted in the first half of next year.

“They really have very good assets within F&N and TCC. The size would really depend on the portfolio and on what they want to inject into the REIT,” said one of the sources involved in the deal.

The sources declined to be identified because the details of the REIT are confidential.

A formal mandate on the advisory roles for the listing has yet to be announced.

DBS Group Holdings (DBSM.SI) and United Overseas Bank (UOBH.SI), the main lenders behind Charoen’s bid for F&N, are expected to nab advisory roles for the REIT’s IPO, the sources said.

    Morgan Stanley (MS.N), which also advised the Thai group on the F&N takeover, and Standard Chartered (STAN.L), which provided initial financing, are also expected to play a key role, they said.

    F&N declined to comment on the size of the deal or the banks that they are talking to.

    F&N said last week it had received proposals from investment banks related to a hospitality REIT, but added that no decision has been made.

    F&N’s hospitality unit owns service residences in major European cities, the Middle East, North and Southeast Asia and Australia, while Charoen’s TCC owns hotels in Asia, Australia, Europe and North America.

    Yield-hungry investors have made Singapore a popular location for REIT offerings. Listings this year have included SPH REIT (SPHR.SI), OUE Hospitality Trust (OUER.SI) and Soilbuild Business Space REIT (SBSR.SI).

    ($1 = 1.2796 Singapore dollars)

    Reporting by Saeed Azhar and Eveline Danubrata; Editing by Ryan Woo

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