New World Development Co. is in talks with several potential investors including Blackstone Inc. and [an unlisted entity within the] CapitaLand Group as the cash-strapped Hong Kong developer seeks to dispose of assets to improve liquidity, according to people familiar with the matter.
Blackstone has been in discussions with New World to buy some of its assets, said the people, asking not to be identified talking about a private matter. The world’s largest alternative asset manager could be open to the option of taking the developer private, though there is no concrete proposal for this on the table, the people said.
Singapore property firm CapitaLand also engaged with New World for exploratory discussions in recent weeks, according to the people.
New World is still facing challenges even after it pulled off one of the city’s biggest refinancing deals worth US$11 billion earlier this year. It has also been trying to secure a
loan of as much as HK$15.6 billion led by Deutsche Bank AG, though it recently missed a self-imposed target for that effort.
Other firms including Ares Management Corp. have also looked at the assets, though there is no indication of any recent concrete discussions, other people said. Blackstone,
CapitaLand and Ares declined to comment. New World didn’t respond to a query.
Controlled by Hong Kong’s Cheng family, New World carries the heaviest debt burden among major developers in the city, amid a prolonged real estate downturn in the financial hub and mainland China. Its net debt reached 95.5% of shareholders’ equity as of December, according to Bloomberg Intelligence.
The Cheng family, worth an estimated US$21 billion as of March, proposed a semi-bailout to New World about two years ago, when it offered to take a subsidiary private and provide the
developer with about HK$21.7 billion. The firm reported its first annual loss in 20 years for the 12 months ended June 2024.
New World said on Thursday no share offers were given to the company by any person, including the controlling shareholder of New World and Blackstone. The statement followed an Octus report that Blackstone and the Cheng family were considering co-investing about $2.5 billion into New World, with options discussed for the investment in the form of preferred or ordinary equity.
Adrian Cheng, the eldest son of the family patriarch, stepped down as chief executive officer in September 2024, and he left the board recently. The Cheng family also owns a stake
in Chow Tai Fook Jewellery Group Ltd., led by Adrian’s sister Sonia Cheng. New World Development might need to focus on selling some of its investment properties to raise liquidity, Bloomberg Intelligence analysts Patrick Wong and John Wong said in a note on Aug 7.
The company has been seeking to sell its 11 Skies mall at a loss, people familiar have said. Its China assets are also up for grabs, and the firm is trying to recuperate cash faster,
people familiar have said.
