Billionaire Koh’s Hotel Unit Surges on Debut: Singapore Mover
The shares climbed to 28.5 Singapore cents at the close, up from the 26 Singapore cents priced for its initial public offering. The Singapore benchmark Straits Times Index climbed less than 0.1 percent.
Billionaire Koh Wee Meng spun off the hotel operator from his property and hospitality company Fragrance Group Ltd., selling 450 million new shares, it said earlier this month. The offer was 5.7 times subscribed, the company said yesterday. Fragrance will retain a majority stake in the hotel unit.
“The gross profit and net profit margins have remained steady in the range of mid-80’s and mid-40’s over the last four years despite a challenging business environment in 2009,” UOB Kay Hian, a Singapore brokerage, said in a report ahead of the debut. “We expect the demand for hotel rooms to remain strong in the coming years on the back of a heavy influx of tourist arrivals.”
Fragrance (FRAG) declined 10 percent to 44.5 Singapore cents, its biggest drop since March 2009.
Koh, Fragrance’s chairman and chief executive officer, has joined the ranks of the world’s billionaires as a surge in his company’s shares boosted his fortune to $1.1 billion, according to Bloomberg calculations. Koh and his wife own an 84.2 percent stake in Fragrance worth about $1 billion, which has doubled in the last 12 months. The rest of his net worth is derived from stakes in other public holdings and dividend income.
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