7 Days IPO Prices at Top of Range

NEW YORK (Reuters) – Chinese hotel chain 7 Days Group Holdings Ltd (SVN.N) priced American depositary shares for $11 each in its initial public offering on Thursday, at the top of the expected price range.

7 Days, which said in its prospectus that it is the third largest economy hotel chain in China, sold 10.1 million ADSs and raised $111.1 million in IPO, an underwriter said.

7 Days, based in Guangzhou, had expected the shares to price between $9 and $11. They will start trading on the New York Stock Exchange on Friday under the symbol “SVN.”

The underwriters of the IPO, which was managed by J.P. Morgan and Citi, have the option to buy 1.5 million additional ADSs.

The company will use the net proceeds, which it estimated would be $92 million based on an midpoint price of $10 per share, to pay down debt.

None of the shares in the IPO were offered by the company’s shareholders.

7 Days reported revenues of $121.7 million for the first nine months of 2009 and an operating profit of $6.9 million. A $9.3 million interest expense during the period caused it to post a net loss of $1.4 million.

The company also posted net losses in each of the past four years going back to 2005.

Despite what it called a “highly competitive” Chinese lodging market, the fast growing chain had 283 hotels in China as of Sept. 30, up from only five hotels in 2005. Its hotels have 28,266 rooms.

Another 77 hotels are on the way, according to the prospectus.

7 Days is the ninth Chinese company to list on a U.S. exchange in 2009. (Reporting by Phil Wahba; editing by Andre Grenon)