Debt woes from Hong Kong developer New World Development are set to continue as further losses loom.
The firm will record a first-half loss from continuing operations of HK$6.6 billion to HK$6.8 billion ($1.13 billion to $1.17 billion), according to its preliminary results on Friday. The loss is mainly due to asset impairment and lower-than-expected prices for its development properties.
New World has been embroiled in turmoil as investors question its ability to cope with one of the highest debt burdens among the city’s developers.
In a dramatic bid to regain confidence, the company replaced CEO in rapid succession and sought to use US$3.8 billion ($5.06 billion) of additional properties as collateral to refinance some loans and ease liquidity pressure.
Together with its peer Sun Hung Kai Properties, the outlook of both developers could hinge on potential measures for the city’s property market, expected in a budget speech by the government on Wednesday.
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Chart: Bloomberg
