GGRAsia – Far East group mulls spin-off of hospitality assets

Far East group mulls spin-off of hospitality assets

Nov 29, 2019 Newsdesk Latest News, Top of the deck, World

Hong Kong-listed property developer Far East Consortium International Ltd announced on Thursday that it is considering a “potential spin-off and separate listing” on an overseas bourse of some of its hospitality properties in “Australia, Singapore, Malaysia and the United Kingdom”.

Far East currently owns gaming operations in three casinos in Czech Republic; and is a strategic partner – along with Hong Kong-based Chow Tai Fook Group – to Australian casino operator The Star Entertainment Group Ltd in its new casino resort project at Queen’s Wharf in Brisbane, the capital of Queensland, Australia.

“The company is considering a potential spin-off and separate listing of certain hospitality properties of the group in Australia, Singapore, Malaysia and the United Kingdom on an overseas securities exchange in the form of a stapled trust group comprising a real estate and investment trust and a business trust,” Far East Consortium told the Hong Kong bourse on Thursday.

If the spin-off proceeds, Far East Consortium said it expected such plan to help create an asset management platform dedicated to hospitality assets and generate a new income stream; “unlock and crystallise” the value of the company’s hospitality properties; and “facilitate more active third-party hotel acquisitions using the spun-off entity”, according to the filing.

Far East Consortium is said to be considering a real estate investment trust listing in Singapore that could raise as much as US$365 million, Bloomberg reported citing sources with knowledge of the matter. The company is working on the potential sale of trust units backed mainly by its Dorsett-brand hotels, the media outlet said.

The proposal for the spin-off of hospitality assets had already been submitted to the Hong Kong Stock Exchange for consideration, according to the Thursday filing. But no application has been made for the listing of the hospitality trust on an overseas securities exchange, said the firm.