SINGAPORE (Nov 4): Eagle Hospitality Trust did not have an auspicious beginning on the Singapore Exchange. Apart from the retail portion’s not being fully subscribed, EHT securities fell below the IPO price of 78 US cents on the first day of trading on May 24. Units in the trust have fallen more since then, ending at 56 US cents on Oct 31.

A trend that has not escaped observers is the regular selling by cornerstone investors, in particular Claydon Hill Investments and Compass Cove Assets. Claydon Hill had divested five or six hotels into EHT. Since Aug 20, Claydon Hill’s stake has fallen from 16.3% to 13.4%, while Compass Cove Assets’ stake is down to 12.41% from 12.99%. Wealthy Fountain Holdings, which belongs to Tong Jinquan, a cornerstone investor at IPO, has sold down its stake from 7.61% to below 5%.

Concerns over the trust’s second-highest value asset and largest contributor to net property income (NPI) (see table), the Queen Mary Long Beach, a retired ocean liner, just will not go away. This is because of a 2017 marine survey report that has been recently cited by the City Council of Long Beach, California in relation to repairs that need to be done to the ship.

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