Chow Tai Fook Enterprises Ltd., the largest shareholder of New World Development Co., is seeking approximately HK$5 billion ($637 million) in fresh bank financing. The investment arm of Hong Kong’s Cheng family aims to secure a liquidity cushion ahead of a potential broad recapitalization of the cash-strapped builder. This move could include a rights issue to inject capital directly from the controlling family.
New World is currently grappling with a severe property downturn, reporting a HK$19.7 billion ($2.5 billion) net loss in its latest fiscal year. The company is also negotiating to extend HK$88 billion in loans by two years. The developer's market capitalization has plummeted 88% from its 2019 peak to about HK$12.8 billion as of November 10.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing