HNA 'seeking more banks for delayed Singapore trust IPO'

The HNA building in Beijing.
The HNA building in Beijing.PHOTO: AFP

KUALA LUMPUR/SINGAPORE (Bloomberg) - HNA Commercial Reit is seeking to add arrangers to its planned Singapore initial public offering (IPO) as Bank of America walks away from the deal, people with knowledge of the matter said.

The real estate investment trust (Reit), backed by embattled Chinese conglomerate HNA Group, has been reaching out to investment banks to gauge their interest in taking a senior role on the deal alongside DBS Group Holdings, according to the people. 

The listing, which was slated to seek more than S$400 million, will be delayed at least until the autumn, one of the people said, asking not to be identified because the information is private.

HNA Group said on July 22 that Bank of America's participation in an unspecified investment trust IPO involving one of its units was terminated for "commercial reasons". HNA Commercial Reit had been planning to gauge investor demand in mid-June and complete the offering in July, people with knowledge of the matter said last month. It will be backed by commercial properties in Australia, Singapore and London worth about S$1 billion, according to the people.

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Several of HNA Group's deals have faced challenges since Chinese regulators began assessing the risks that the company and other serial dealmakers pose to the nation's financial system. HNA Group is fielding additional questions from banks working to finance its proposed S$1.4 billion takeover of Singapore logistics operator CWT, people with knowledge of the matter said this week.

Representatives for Bank of America, DBS and HNA Commercial Reit declined to comment. The situation remains fluid, and details of the HNA Commercial Reit offering could change, according to the people.

United States officials are examining HNA Group's proposed purchase of SkyBridge Capital, the hedge-fund firm founded by White House communications director Anthony Scaramucci, while the European Central Bank is considering a review of its stake in Deutsche Bank, people with knowledge of the matter have said. Those transactions are among more than US$40 billion of deals that HNA Group has announced since the beginning of 2016, data compiled by Bloomberg show.

HNA Investment Group, a Shenzhen-listed arm of the Chinese conglomerate, and Singapore's AEP Investment Management will contribute assets to the commercial property trust, the people said last month. HNA Investment announced in March it planned to buy at least a 35 per cent stake in a Reit that will list in Singapore, as well as 75 per cent of a trust management company formed with AEP.