Australia's second largest hotel and resort operator will make a $239 million entrance to the share market on Friday, amid weak consumer spending on travel and holidays.
Mantra Group operates 113 hotels, resorts and serviced apartments across Australia, New Zealand, and Indonesia, catering for about two million guests a year.
Its network includes the Peppers and BreakFree chain of hotels and resorts.
Mantra has raised $239 million by selling slightly more than half of its shares to the public, the proceeds of which will be used to reduce its debt.
Its shares will begin trading on the ASX on Friday at $1.80 each, valuing the company at $449 million.
Mantra does not own its hotels and resorts, instead operating them under leases and management marketing services agreements.
It made a profit of $24.6 million in 2012/13, and expects that to grow to $27.4 million in the current financial year.
Mantra says it has a good quality portfolio of properties in a strong sector of the Australian economy, although it does acknowledge it is exposed to downturns in economic conditions, such as weak consumer confidence and fluctuating exchange rates.
Confidence has been hampered by spending cuts announced in May’s federal budget, with travel group Flight Centre recently warning its profit could be hit by a fall in holiday bookings since mid-April.
Mantra’s chief executive Bob East has 20 years experience in tourism, and has led the company since 2007, while chairman Peter Bush is a former chairman of McDonald’s Australia and Nine Entertainment.