Sunway woos REIT cornerstone investors
May 24, 2010
KUALA LUMPUR, May 24 — Sunway City may place out about a fifth of its planned IPO of a real estate investment trust (REIT) to cornerstone investors who have greater holding power for the shares, sources with direct knowledge of the deal said.

The country's sixth-biggest property company by market value is in talks with seven local funds in the hopes of getting some of them to become cornerstone investors in the IPO which is expected to raise around US$500 million (RM1.66 billion), the sources said.

The Sunway REIT, with a fund size of 2.78 billion units, is set to become Malaysia's largest when it is listed in the third quarter of this year.

The Sunway REIT offering comes at a time when companies elsewhere in Asia downsize or put on hold listing plans due to uncertain global market conditions following the fallout of the euro zone debt crisis.

Malaysia's most recent IPO debut saw Masterskill Education open sharply lower in the trading debut of its US$240 million IPO, hurt by euro zone turmoil and an overly rich valuation.

Sunway's planned REIT offering has received positive response from investors so far due to its size, steady income source and good growth prospects, a source said.

"This is something significant that investors would not want to miss. The interest is definitely there, the question is pricing," said the source.

The sources could not be named because they were not authorised to speak to the media.

The Sunway REIT will feature some 1.65 billion units for public subscription, of which 1.5 billion are for institutional and selected investors, the company said earlier this month.

"They are talking to seven funds, which consist of insurance funds, unit trust funds, government-linked investment companies, and a few pension funds," said a second source.

Sunway is looking to place out about one-fifth of the offering to cornerstone investors, one of the sources said.

Cornerstone investors normally commit to buy shares before a public listing and promise to hold them until a later date.

Sunway City declined comment.

The issue price of the Sunway REIT will be determined in a book-building process.

Earlier this month, Sunway City said it would receive 2.7 billion ringgit in cash and about 1.0 billion units in the REIT for the eight properties it will inject into the unit.

The properties, comprise of shopping malls, office towers, and hotels, have a combined market value of about RM3.7 billion.

Sunway City Group, controlled by Malaysian businessman Tan Sri Jeffery Cheah, will own about 38 per cent of Sunway REIT after the listing, which the company said may be completed mid-July. — Reuters

I though they delay the listing due to Japan Earthquake. No news on when to list. I also interested.

http://www.reuters.com/article/2011/04/21/...E7FL18020110421