OUE files preliminary prospectus for Reit listing, seeks to raise up to $614 million

The Overseas Union Enterprise (OUE) logo is seen on its office building in Singapore. OUE is seeking to raise up to $391 million by spinning off two properties into a trust. -- FILE PHOTO: REUTERS
The Overseas Union Enterprise (OUE) logo is seen on its office building in Singapore. OUE is seeking to raise up to $391 million by spinning off two properties into a trust. -- FILE PHOTO: REUTERS

Overseas Union Enterprise (OUE) is seeking to raise up to $614 million by spinning off two properties into a trust.

It lodged a preliminary prospectus for the initial public offering of OUE Hospitality Trust with the Monetary Authority of Singapore on Wednesday.

The stapled trust consists of the OUE Hospitality Real Estate Investment Trust (H-Reit) and OUE Hospitality Business Trust. The reit will hold two assets, the Mandarin Orchard hotel and the Mandarin Gallery mall along Orchard Road.

Around 434.6 million stapled securities will be offered to the public and institutional investors, at a price of between 88 cents and 90 cents apiece, raising between $382.4 million and $391.1 million.

About 11 per cent of that, or 51.1 million, will be available to retail investors. The rest will go on placement.

Additionally, cornerstone investors will subscribe to 247.2 million stapled securities worth up to $222.5 million.

Based on the 88-90 cent price range, the distribution yield for the full year 2013 could range from 6.99 per cent to 7.15 per cent, according to the preliminary prospectus.