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Report: AEP Investment mulls cutting ties with HNA on Singapore REIT IPO

AEP Investment Management Pte. is considering ways to cut back on HNA Group Co.'s participation in the proposed IPO of HNA Commercial REIT in Singapore, Bloomberg News reported, citing people familiar with the matter.

Among the options being explored by Singapore-based AEP are reducing the stake HNA Group would assume in the real estate investment trust and its managing entity, as well as cutting the REIT's reliance on real estate from the Chinese conglomerate, the unnamed sources told the news outlet.

The partners had initially planned to inject roughly S$1 billion of properties into the REIT. One asset was meant to be contributed by HNA Group and four properties by AEP, Bloomberg noted, citing a recent filing.

The sources said AEP has started engaging with other possible partners to determine their interest in backing the REIT. However, AEP has not finalized its decision and plans to maintain some ties with HNA Group for now. It is also likely that AEP might not revise the current deal structure with HNA Group. As the parties work out their future ties, the REIT's IPO will be pushed back later in 2017, although the sources said it could be deferred to 2018, Bloomberg noted.

Citing an email, the news outlet quoted HNA Group as saying, "The information in this story isn't in line with the actual situation," and that "HNA's cooperation with AEP is normal."

An AEP representative was not immediately available for comment on the matter, according to the report.

As of Aug. 4, US$1 was equivalent to S$1.36.