Frasers Hospitality Trust (FHT)

[mkmk]

http://www.theedgemarkets.com/sg/article...on-sofitel

SINGAPORE (June 25): Frasers Hospitality Asset Management, the manager of Frasers Hospitality REIT, and Frasers Hospitality Trust Management, the manager of Frasers Hospitality Business Trust, have launched the private placement of 150 million new stapled securities at between 81 cents and 82 cents each to raise gross proceeds of up to $123 million.

Frasers Hospitality Trust intends to use the net proceeds of $120 million to fund the $248 million acquisition of a 75-year leasehold interest in Sofitel Sydney Wentworth from manager, sponsor and part owner Frasers Centerpoint Limited.

After the placement, the free float of the trust is projected to increase from 453.8 million to 544.5 million.

TCC Group, the ultimate controlling shareholder of Frasers Centerpoint Limited and Frasers Hospitality Trust, has given its undertaking to subscribe to its entitlement of new stapled securities at the issue price.

DBS Bank, Morgan Stanley Asia (Singapore), Standard Chartered Securities (Singapore), and United Overseas Bank are the joint bookrunners and underwriters for the offering.

(not vested)

[specuvestor]

I've been wondering: for stapled securities, does the dormant entity (or in future becomes active) gets funded proportionately as well in capital raising or the trust manager has discretion?

[cyclone]

Update.

Completion of Acquisition of Maritim Hotel Dresden, Germany

Maritim Hotel Dresden is the first hospitality asset acquired by FH-REIT in Germany. Located at Devrientstr. 10 and 12, Kleine Packhofstr. 17, 01067 Dresden, it is a freehold 328-key, heritage-listed property.

Save for the acquisition fee payable to the REIT Manager, the total cost of the Acquisition, including professional and other fees and expenses, of approximately €62.5 million (approximately S$96.5 million) has been fully funded by the proceeds from the issuance of S$100 million fixed rate subordinated perpetual securities in FH-REIT which was announced on 12 May 2016. The Acquisition Fee, as stated in the Announcement, will be paid in the form of stapled securities in Frasers Hospitality Trust.

<not vested>

[BlueKelah]

Since we are talking about FCL, I happen to come across this in one of my broker feeds so just posting for info sake.

FHT 266.3m Rights issue oversubscribed 141.3%

Frasers Hospitality Trust’s S$266.3 Million Rights Issue Oversubscribed at 141.3%
 Gross proceeds will be deployed primarily to acquire a prime hotel in Melbourne’s core central business district area
 Acquisition to enhance FHT’s portfolio resilience through geographical diversification
 Rights Stapled Securities will be listed and quoted on the Mainboard of the SGX-ST with effect from 9.00 a.m. on 17 October 2016


Haha this Thai boss like the Chinese using cheap and easy credit to buy up everything everywhere...

[RBM]

Trading in Frasers Hospitality Trust halted this morning. Thai media are reporting that major Shareholder TCC is looking to raise funds to privatize FHT. Share Price has had a good run lately as Covid restrictions have been eased and early April rumours of privatization did no harm. A bit of hope here?

Vested.

P.S. FHT isn’t the most exciting stock on the SGX. Proof Point: Prior to this post the most recent VB post was >5.1/2 years ago.

[weijian]

In general, it is better to be an asset manager, than asset holder. And everyone is trying to become the former now (eg. Keppel Corp, Straits Trading and Capitaland restructuring itself)

Although the days of holding minority stakes in their AUM are over, but the asset management business is still immensely lucrative with low capital outlay. It is therefore really interesting that the asset manager is going in the opposite direction here?

[ghchua]

Hi weijian,

The asset manager we are talking about here is Frasers Property Ltd, which is halted as well. I think most market participants are speculating that Frasers Hospitality Trust will be bought out, but I will not rule out a restructuring at the asset manager level as well. Which means, there might be some corporate activity at Frasers Property Ltd level, together with Frasers Hospitality Trust.

Frasers Property Ltd had been trading significantly below its NAV for the past two years.

We shall know the answers soon.

[RBM]

As I recall it, the maximum duration of a Trading Halt for SGX listed entities is 3 Market Days. So, given FHT’s Halt was sought prior to trading Thursday a.m., we’ll likely become more enlightened on the drivers behind the seeking of the Halt latest before SGX trading commences Tuesday morning.

If a proposed acquisition is revealed, I agree the possibility that Frasers Property is the acquirer cannot be ruled out. It is also worth recalling that Frasers Logistics & Industrial Trust (FLT) acquired Frasers Commercial Trust (FCOT) largely by issuing new Trust Units, thereby circumventing debt ratio limitations imposed on Trusts and avoiding the need to raise significant capital thru a rights issue. I have to wonder, however, if as widely rumoured, parent TCC and its billionaire doyen are truly frustrated by current (low) FHT valuations, what TCC would gain by Frasers Property or another Frasers Trust acquiring FHT ?? Thai business media are reporting that ~$ 500 Mln financing is being sought: if true, I suggest that points to TCC being the acquirer.

If indeed a buy-out of FHT is imminently announced, it will be interesting to see if there are knock-on implications for other SGX listed Hospitality Trusts namely: Ascott Residence Trust, CDL Hospitality Trusts, Far East Hospitality Trust and maybe even OUE Commercial REIT, given its weighty hospitality components.

Vested, in FHT and Frasers Logistics & Commercial Trust (and formerly FCOT and FLT).

[ghchua]

what TCC would gain by Frasers Property or another Frasers Trust acquiring FHT ??

Both of the other listed Frasers trusts are still trading on the exchange, which means there cannot be a case of either of them merging with FHT. Otherwise, they would have been halted as well.

Frasers Property acquiring FHT is possible, but it doesn't make sense as an asset manager, as weijian had pointed out. Asset managers want to be asset light, not asset heavy.

Which leaves only TCC in the equation. Yes, it is possible that they will be the one buying out FHT, possibly doing some restructuring at Frasers Property level as well.

If indeed a buy-out of FHT is imminently announced, it will be interesting to see if there are knock-on implications for other SGX listed Hospitality Trusts namely: Ascott Residence Trust, CDL Hospitality Trusts, Far East Hospitality Trust and maybe even OUE Commercial REIT, given its weighty hospitality components.

I see Far East Hospitality Trust as the only similar trust here out of the list that you have provided. In terms of size and structure, it is the most relevant. Ascott Residence Trust and CDL Hospitality Trust are larger trusts while OUE Commercial REIT is quite a mixture.

[RBM]

what TCC would gain by Frasers Property or another Frasers Trust acquiring FHT ??

Both of the other listed Frasers trusts are still trading on the exchange, which means there cannot be a case of either of them merging with FHT. Otherwise, they would have been halted as well.

Frasers Property acquiring FHT is possible, but it doesn't make sense as an asset manager, as weijian had pointed out. Asset managers want to be asset light, not asset heavy.

Which leaves only TCC in the equation. Yes, it is possible that they will be the one buying out FHT, possibly doing some restructuring at Frasers Property level as well.

If indeed a buy-out of FHT is imminently announced, it will be interesting to see if there are knock-on implications for other SGX listed Hospitality Trusts namely: Ascott Residence Trust, CDL Hospitality Trusts, Far East Hospitality Trust and maybe even OUE Commercial REIT, given its weighty hospitality components.

I see Far East Hospitality Trust as the only similar trust here out of the list that you have provided. In terms of size and structure, it is the most relevant. Ascott Residence Trust and CDL Hospitality Trust are larger trusts while OUE Commercial REIT is quite a mixture.

For acquirer, I’m with you that TCC is the most likely. I was thinking more of TCC’s Thai-Listed (and non-listed) Trusts as potential, albeit much less likely, acquirers - these are not bound by the same disclosure & suspension/halt regulations as SGX Listed Trusts. Moreover, there would be rumoured (I stress: rumoured) Tax Advantages of pushing down debt in a Thai vehicle. Still, if the ongoing halt is related to an offer to acquire minority interests in FHT, my bet is TCC will be the acquirer.

As for wider implications on Singapore’s Hospitality Trust sector, let’s see. The sector is a bit of a puzzle - and I wonder if some consolidation could be around the corner? Of all my personal holdings, at the beginning of 2022, I would have considered FHT one of the least likely near-term candidates for privatisation. Shows what I know.

Vested in FHT and Frasers Logistics & Commercial.