BUDGET hotel operator 7 Days Inn Group will likely go public as early as the second half of next year, possibly on New York's Nasdaq, senior company officials said yesterday in Shanghai.
"It is very important for hotel operators to raise funds through a listing as we're in a capital-intensive industry," said Zheng Nanyan, chief executive officer of the Guangzhou-based hotelier. "However, the listing plan is still in its infancy, and we haven't started any preparation work yet."
Major competitor Home Inns raised some US$109 million in an October 2006 initial public offering on Nasdaq and attracted an additional US$120 million through a new share sale in May this year.
Meanwhile, 7 Days Inn also announced plans to increase its domestic portfolio to 150 hotels by the end of this year after receiving an additional investment of US$95 million from three international investors.
Merrill Lynch, Deutsche Bank and Warburg Pincus contributed to the hotel operator, the company said, without disclosing the amount from each investor.
It was the second time Warburg Pincus put money into 7 Days Inn. In November 2006, the US private equity firm invested US$10 million.
The extra cash from the three global investors will be used to expand the hotelier's current network in China and further upgrade its online service platform, according to Zhou Huaisheng, vice president of 7 Days Inn.
Established in March 2005, 7 Days Inn has opened 61 hotels in more than 20 cities across the country and has 70 more in the pipeline.
China's budget inn industry kicked off in 1997 when Shanghai-based Jinjiang Inn Co Ltd opened its first hotel in the city.
There are now more than 1,000 budget hotels in the country operating under some 100 brands, with leading domestic players such as Jinjiang Inn, Home Inns, Motel 168 and 7 Days Inn as well as overseas competitors like Super 8 and Holiday Inn Express.