Asia-focused property firm JSM Indochina Ltd. sharply cut its planned listing on London's junior market AIM to $220 million, citing tough market conditions.
JSM, set up to invest in Vietnamese and Cambodian real estate, said on Friday it plans to issue 220 million shares at $1 per share.
Earlier this month, the firm was looking to raise between $400 million and $600 million through an initial public offering (IPO) of up to 600 million shares.
"There are difficult IPO conditions at the moment in real estate... the market has been tough off the back of the Vector float that was postponed," said a spokeswoman for JSM. "That has harmed this one," she added.
A few weeks ago, British hotel owner Vector Hospitality pulled a potentially record-breaking $3.6 billion IPO blaming weak market sentiment and Spain's Realia (RLIA.MC: Quote, Profile , Research) was forced to slash its offering price.
However, Vector's failed float was because of a conflict of interest between the management of Vector and the company intending to sell it property assets after the float, Marylebone Warwick Balfour (MWB.L: Quote, Profile , Research), rather than underlying market conditions, Marylebone's biggest shareholder Mercury Real Estate Advisors said in an open letter this week.
JSM Chief Executive Craig Jones had shrugged off concerns of potential lukewarm demand for property stocks earlier this month. "We feel very comfortable with our 400 to 600 million (dollar) raise," he told Reuters then.
"Investors currently have a limited ability to gain exposure to real estate in Vietnam and Cambodia," JSM said on Friday, adding that it would offer investors access to real-estate opportunities in some of South East Asia's fastest-growing markets.
Sole bookrunner to the placing is the U.S. investment bank Lehman Brothers, which would subscribe to 13.5% of the issued shares, JSM said.
Trading in the shares is expected to commence on July 2.
Source: Reuters
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