After the disappointment with Trans-cab listing, that was aborted days before its listing, the city-state’s stock market, will test investors’ confidence with two trust IPOs. The trusts seek to raise about $1.2 billion in December, in Singapore stock exchange, which has been facing a slump this year
The first listing is of Universal Terminal, partly owned by Chiana’s oil giant PetroChina, which has begun premarketing its $800 million IPO for its storage terminals. The company is scheduled to begin its book building on December 4 and is targeting a December 18 listing; as it plans to ride on the wave of trusts seeking to list their assets here.
Till last year, Singapore benefited significantly from companies using its trust regime to list their assets in the city state. Situation has been different this year, as funds sought destinations with better returns, appetite for business trusts and REITs fell significantly.
The benchmark this year has been Accordia Golf Trust, which raised S$760 million; but a majority of investors for this IPO were from Japan.
Last year, Singapore saw companies raise more than $5 billion through IPOs. Over 90% of these were business trusts or REITS. Till now, the figure is less than a third of this for the current fiscal.
A total of 58 trusts have gone for IPOs in Singapore.
If successful, the petroleum storage company Universal Terminal could emerge as Singapore’s largest IPO this year. Executives in the finance space, tracking Universal IPO, said the company had not decided on its indicative yield yet.
PetroChina is estimated to have a 35% stake in Universal Terminal, while the rest is owned by Singapore billionaire Lim Oon Kuin’s Hin Leong Group. The company plans to use the proceeds from the IPO to expand operations in Asia.
The second listing will be that of Keppel Telecommunications and Transportation Ltd (Keppel T&T) which is also targeting a mid-December listing for its data centres, and plans to raise about S$540 million ($432 million).
DEALSTREETASIA has learnt that Keppel DC REIT, which plans to offer 7% yield, has attracted about 10 cornerstone investors, who have agreed to buy more than 50% of the units on offer.
Keppel DC Reit will sell about 70% of its enlarged share capital with parent firm, and plans to use about half the proceeds to subscribe to units of this real estate investment trust (REIT). Keppel T&T will own the remaining 30%.
Keppel T&T is a unit of Singapore conglomerate Keppel Corp and the REIT will allow the company to finance its own expansion plans without having to depend on its parent company. This will be the second REIT, to be listed by Keppel Corporation. About a decade ago, it had floated Keppel REIT on the Singapore exchange.
This also marks the first IPO of a data center trust in Asia. The REIT will launch with eight properties in Asia-Pacific and Europe: Keppel Digihub and Keppel Datahub 1 in Singapore; Gore Hill Data Centre in Sydney and iseek Data Centre in Brisbane; Basis Bay Data Centre in Selangor; GV7 Data Centre in London; Almere Data Centre in Amsterdam and Citadel 100 Data Centre in Dublin.