New World Development Co. (17), the Hong Kong builder controlled by billionaire Cheng Yu-tung, may seek as much as $1 billion from an initial public offering of hospitality assets, said two people with knowledge of the matter.
The company, with stakes in 16 hotels in Hong Kong, China and Southeast Asia, may complete the IPO in the second or third quarter, the people said, asking not to be identified because the information is private. The assets to be spun off are mainly in Hong Kong, one of the people said.
At $1 billion, the IPO would be the biggest in Hong Kong since People’s Insurance Company (Group) of China Ltd. raised $3.6 billion in November. The eight-member Hang Seng REIT Index (HSREIT) is up 30 percent in the past year, compared with a 9.5 percent gain in the broader benchmark.
New World spokeswoman Karen Wong declined to comment. The company last week said it is considering listing some of the assets and hasn’t decided on the timing or other details. ETNet.com reported the size and timing of the offering earlier today, without identifying its sources.
New World owns stakes in five hotels in Hong Kong and Kowloon, including the Renaissance Harbour View and Grand Hyatt in Wan Chai, and the Hyatt Regency in Tsim Sha Tsui. Hotels and restaurants brought in revenue of about HK$3.6 billion ($465 million) in the six months ended Dec. 31, accounting for 11 percent of New World’s sales, according to data compiled by Bloomberg.
Deutsche Bank AG, HSBC Holdings Plc, JPMorgan Chase & Co., BOC International Holdings Ltd. and Standard Chartered Plc are arranging the sale, the people said.
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