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Andrew Tan’s hotel group postpones IPO

By Jenniffer B. Austria | Posted on Jul. 10, 2013 at 12:02am |
Travellers International Hotel Group Inc., a joint venture between Alliance Global Group Inc. of business tycoon Andrew Tan and Genting Hong Kong Ltd., has deferred a plan to sell P42 billion worth of shares originally scheduled this month due to unfavorable market conditions.
“In view of the current market conditions, the company decided to postpone the implementation of its IPO. We shall inform your good office when the company decides to resume its IPO as soon as more favorable market conditions occur,” Travellers International said in a letter to the Philippine Stock Exchange.
Informed sources said Travellers International was originally scheduled to list its shares under the first board of the PSE on July 19.
The share sale would have been one of the biggest IPOs this year.
Global markets are currently volatile after the US Federal Reserve said it would start reducing its economic stimulus because of the improving US economy. The Fed  announcement resulted in massive outflows of foreign funds from emerging markets, like the Philippines, to developed economies.
The PSE board in a meeting on June 26 approved the IPO plan of Travellers International. The company plans to sell 1.8 billion shares at an offering price of up to P23.38 apiece.
They consist of 1.572 billion primary common shares and 235.983 million shares for overallotment, which are exercisable within 30 days after the listing date.
Travellers International tapped Merrill Lynch, CIMB, Maybank, Religare Capital Markets and UBS as underwriters for the planned offering.
The company said it plans to use proceeds from the sale of primary shares to partially finance the P24.7-billion expansion of Resorts World Manila and debt repayment.
Travellers International operates Resorts World Manila, the first integrated leisure and resort property in the Philippines that combines privately-operated gaming facilities with hotel, retail, dining, entertainment and other leisure amenities.
The expansion of Resorts World Manila involves the construction of a grand ballroom and convention center, and additional rooms in Marriott Hotel.
The 11,000-square meter and the 2,000-seater convention center will cost P7.28 billion. The two projects are expected to be completed by September 2014.
Travellers International is currently developing 10-story annex to the Marriott Hotel with a 3,000-sq. m. space that will add 227 rooms. Capital spending is estimated to reach P1.92 billion, with completion expected this month.
The second phase of the expansion costing P15.54 billion involves the construction of two new hotels—Sheraton and Hilton Manila.
The two new hotels will add 912 rooms to Resorts World Manila and a gaming area of 7,995 sq. m. The second phase is slated for completion by 2017.

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