Jinjiang Hotels woos investors before IPO

Jinjiang International Hotels Development, the mainland's largest hotel operator, is in talks with international hoteliers including Starwood Hotels & Resorts and Fairmont Hotels and Resorts over selling a strategic stake in the run-up to the company's US$300 million initial public offering, sources said.

Should the company invite an overseas chain as a strategic investor, the share offering could be pushed back to early next year, a person familiar with the situation said. Originally, a sale as early as the third quarter had been planned.

UBS and BNP Paribas are arranging the share sale.

Jinjiang Hotels, which manages about 250 four- and five-star hotels in Beijing, Shanghai and in Zhejiang and Jiangsu, runs Peace Hotel, a 100-year-old building on the Bund in Shanghai which with the Raffles Hotel in Singapore were Asia's most opulent hotels in the 1930s.

'[Overseas investors] will improve the quality of service at the hotels because the [mainland] operators still do not do five-star very well,' said Tung Tai Securities associate director Kenny Tang Sing-hing. 'If you want to improve the service and attract more different travellers, then you need them.'

Jinjiang Hotels, which saw a 13 per cent rise in net income to 98 million yuan in the first half on sales of 466 million yuan, also runs Jinjiang Inn, a chain of three-star hotels spread across 10 provinces.