HNA Seeks More Banks for Delayed Singapore Trust IPO

  • Listing delayed at least until autumn as BofA walks away
  • REIT offers senior role on potential S$400 million deal

Commercial buildings stand illuminated along the Singapore River at night in the central business district of Singapore, on Saturday April 9, 2016. Singapore edged past Hong Kong as the world's No. 3 financial center. The Southeast Asian city-state ranks behind London and New York on the Global Financial Centres Index, according to a survey by London-based research firm Z/Yen Group.

Photographer: Sam Kang Li/Bloomberg

HNA Commercial REIT is seeking to add arrangers to its planned Singapore initial public offering as Bank of America Corp. walks away from the deal, people with knowledge of the matter said. 

The property trust, backed by embattled Chinese conglomerate HNA Group Co., has been reaching out to investment banks to gauge their interest in taking a senior role on the deal alongside DBS Group Holdings Ltd., according to the people. The listing, which was slated to seek more than S$400 million ($295 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 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. 

“HNA will need to get a financial adviser of similar stature as BofA in order to assuage the market’s concerns,” Justin Tang, a director of global special situations at Religare Capital Markets in Singapore, said Saturday by phone. “Investors will be demanding a higher yield and seeking a greater risk premium because of all the questions surrounding HNA.”

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 $1 billion takeover of Singapore logistics operator CWT Ltd., people with knowledge of the matter said this week.

Regulatory Scrutiny

Any listing would add to the $2.1 billion raised through Singapore IPOs this year, up from $1.7 billion during the same period in 2016, data compiled by Bloomberg show. The situation remains fluid, and details of the HNA Commercial REIT offering could change, according to the people. 

Representatives for Bank of America, DBS and HNA Commercial REIT declined to comment.

U.S. 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 AG, people with knowledge of the matter have said. Those transactions are among more than $40 billion of deals that HNA Group has announced since the beginning of 2016, data compiled by Bloomberg show.

HNA Investment Group Co., a Shenzhen-listed arm of the Chinese conglomerate, and Singapore’s AEP Investment Management Pte 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 percent stake in a REIT that will list in Singapore, as well as 75 percent of a trust management company formed with AEP.

— With assistance by Ruth David

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