Orchard Parade Surge today due to news, that Far East is planning to raise at least $500m through listing of its hotel and serviced residence assets in a reit next yr. One of the assets that may be spun off into the reit has been identified as Orchard Parade Hotel owned by Far East's listed entity Orchard Parade Holdings
In fact, in a statement by OPH last evening, Co. confirmed it is in preliminary discussion with Far East over injection of some assets into the reit. Other assets owned by OPH include Albert Court Hotel and Central Square Serviced Apartment, both of which would fit the reit well.
Possible scenarios could play out would include
1) A straight cash sale from OPH to the reit at market value
2) OPH could be privatised by Far East before the formation of the reit (Note OPH's rnav is above $2.50)
3) Shareholders of OPH are paid in units of the new reit
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