7 Days Group Holdings soars after IPO pricing

posted: 81 DAYS 16 HOURS AGO

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NEW YORK -Shares of 7 Days Group Holdings Ltd. soared on Friday after the discount lodging chain priced an initial public offering at the high end of an expected range.

The stock jumped $2.50, or 22.7 percent, to $13.50 in morning trading on the New York Stock Exchange under the ticker "SVN."

Some investors may see growth opportunities for 7 Days, given an expanding population in China, an emerging market for travel.

The company, which operates more than more than 280 hotels throughout China, priced 10.1 million shares at $11 per share. That's at the high end of a previously expected range between $9 and $11 per share.

Cash raised in the deal will be used to pay down debt and fund working capital, 7 Days said. Proceeds will also help build more locations and improve others.

In 2008, 7 Days lost $185.2 million, but was able to turn a profit in the most recent quarter.

J.P. Morgan Securities Inc. and Citigroup Global Markets Inc. are acting as joint bookrunners for this offering.

2009-11-20 10:17:35