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Free Malaysia Today
2 days ago
- Business
- Free Malaysia Today
HKs New World Development secures US$11bil refinancing deal
Hong Kong is suffering its longest property market downturn since the SARS outbreak in 2003. (EPA Images pic) HONG KONG : Hong Kong property firm New World Development said today that it has closed a refinancing deal worth HK$88.2 billion (US$11.2 billion), securing a lifeline as the builder braves a prolonged market slump. The firm, run by Hong Kong tycoon Henry Cheng's family empire, last year reported its first annual loss in two decades and has one of the highest debt burdens among the city's developers. The deal today covers 'approximately HK$88.2 billion of the group's existing unsecured offshore financial indebtedness', including bank loans, New World said in a stock exchange filing. It is the largest-ever borrowing of this type in Hong Kong, according to Bloomberg News. The developer said the deal terms 'allow the group more flexibility to better manage its expected ongoing business and financial needs'. CEO Echo Huang said New World will prioritise 'reducing indebtedness and improving cash flow'. 'The group will continue to implement treasury management strategies and adhere to its existing financial obligations,' Huang added in a statement. New World last month said it would defer interest payments of some bonds, a move that does not typically result in default but nevertheless indicated liquidity pressures, Bloomberg News reported. The developer said total liabilities stood at HK$211 billion as of the end of last year, according to its interim report published in February. Brock Silvers, managing director at private equity firm Kaiyuan Capital, told Bloomberg News that New World 'may have dodged a bullet' but Hong Kong's economy was still at significant risk. 'Developers remain overly indebted, and more companies are likely to need reorganisation,' Silvers said. New World is one of Hong Kong's top developers with a wide range of residential and commercial projects, including the K11 malls in the tourist district Tsim Sha Tsui. Its real estate arm has been under stress as Hong Kong suffers the longest property market downturn since the SARS outbreak in 2003. The group replaced its CEO twice in rapid succession last year.
Forbes
2 days ago
- Business
- Forbes
Ayala Land Buys Philippine Hotel From Cash-Strapped New World
The 578-room New World hotel in the Makati business district. Ayala Land—controlled by tycoon Jaime Zobel de Ayala and his family—has acquired Hong Kong-listed New World Development's hotel in the heart of the Makati business district as the Philippine developer expands its hospitality footprint amid a tourism boom. The 578-room New World Hotel Makati will be operated by Ayala Land's hospitality and resort unit, the builder, a unit of the Zobel de Ayala family's Ayala Corp., said in a statement without disclosing the transaction's amount. The sale coincides with the announcement that New World Development, controlled by the family of billionaire Henry Cheng, has concluded a HK$88.2 billion ($11.2 billion) debt refinancing deal, providing a reprieve to the cash-strapped builder. New World opened its sole hotel in the country in 1994 on land leased from Ayala Land. The acquisition of New World Makati bolsters the presence of Ayala Land in the Makati financial district, in which the developer has initiated major upgrading projects, including the redevelopment of its oldest retail complex. Many of the group's prime properties including hotels, upscale shopping malls and office buildings are in Makati. 'This move reflects our continued focus on offering a cohesive and high-quality guest experience across key locations,' said George Aquino, CEO and President Ayala Land Hospitality. 'The addition of New World Hotel Makati complements our existing portfolio and reinforces our commitment to serving evolving customer needs in one of the country's most dynamic cities.' Ayala Land said in March that it will spend $500 million to almost double its hotel rooms to 7,500 by 2030 to ride the nation's tourism boom. The builder, which then said that it had 4,000 hotel rooms, will reinvest in flagship hospitality properties, modernize its Seda business hotels and upgrade its El Nido Resorts in the idyllic Palawan islands while building new hotels and resorts. With a net worth of $2.6 billion, the Zobel de Ayala family is among the wealthiest in the country. From a distillery founded by the grandfather of Jaime Zobel de Ayala in 1834, Ayala Corp., the oldest Philippine conglomerate, has expanded into banking, real estate, healthcare, schools, telecommunications and energy. Cheng and his family had $19.5 billion in net worth when Forbes Asia published Hong Kong's rich list in February. Aside from New World Development, the family holds a controlling interest in Chow Tai Fook Jewellery Group.
Business Times
3 days ago
- Business
- Business Times
New World closes record US$11.2 billion loan refinancing deal
[HONG KONG] Distressed Hong Kong builder New World Development has closed a US$11.2 billion loan refinancing deal, formally concluding months of negotiations with banks for the largest-ever such borrowing in the city. The company successfully refinanced certain of its existing offshore unsecured financial indebtedness, including bank loans, through a new refinancing term loan facility, it said in a filing to the Hong Kong stock exchange on Monday (Jun 30). The developer also said it aligned its other existing offshore unsecured bank loans with the terms of the new refinancing loan. The deal was all but done after the cash-strapped builder last week secured written commitments from all participating banks, with only procedural steps having remained for lenders to sign the loan documents, Bloomberg News reported at the time. The transaction offers a much-needed reprieve for New World, which has been working hard to preserve liquidity and stabilise its finances. Documentation shows that if the company hadn't achieved a 100% approval by June 30, the refinancing could have fallen through as any collateral pledged would be released and bank commitments cancelled. The new bank facility consists of multiple tranches of bank loans with different maturities, with the earliest maturity date being 30 June 2028, and include financial covenants and security interests granted over certain of the group's assets, which allow the group more flexibility to better manage its expected ongoing business and financial needs, the filing says. New World, controlled by the family empire of Hong Kong tycoon Henry Cheng, has encountered significant challenges amid the prolonged property downturn in Hong Kong and mainland China. Concerns grew among investors regarding the firm's ability to manage its debt, particularly after the builder decided to delay coupon payments on four perpetual notes, which led to a bond selloff. BLOOMBERG
Business Times
6 days ago
- Business
- Business Times
New World gets 100% lender approval for US$11 billion refinancing
[HONG KONG] Distressed Hong Kong builder New World Development has secured written commitments from all banks for a US$11.1 billion loan refinancing, people familiar with the matter said, bringing it closer to finalising the critical lifeline just days before a deadline. The deal is all but done, with only procedural steps left for lenders to sign the loan documents, which should happen shortly, according to the people. It brings relief just as investors had been closely watching debt deadlines, including interest totalling US$9.2 million due Friday (Jun 27) and Monday on three local-currency bonds. New World's refinancing – which would be one of the largest of its kind ever in Hong Kong – marks the end of months-long negotiations for a debt package that would pull it from the brink of default. It buys time even as a prolonged property downturn in China continues to weigh on the builder, whose 11 Skies mall project opening in phases next to Hong Kong's airport is one of the first things many visitors to the city see. The developer's shares rose as much as 6 per cent in Hong Kong on Friday morning, before paring gains to about 1 per cent. It's now trading at around HK$5.9, set for the highest level in three months, according to Bloomberg-compiled data. Some of its dollar bonds were up 1 to 3 US cents, according to credit traders. The deal comes with little time to spare. Documentation shows that if New World didn't achieve a 100 per cent approval by June 30, the refinancing could fall through as any collateral pledged would be released and bank commitments cancelled. Controlled by the family empire of Hong Kong tycoon Henry Cheng, New World has faced significant challenges amid the real estate slump in Hong Kong and mainland China, following years of aggressive debt-driven growth. Investors had grown increasingly concerned about the firm's ability to manage its debt, particularly after it decided to delay interest payments on four perpetual notes, triggering a bond selloff. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up The refinancing agreement would push back HK$63.4 billion (S$10.29 billion) of borrowings that were set to come due this year and next, extending the maturities for three years, Bloomberg reported earlier. For HK$24.1 billion in loans due in 2027 and beyond, the maturities would remain the same, but New World will have to add some credit enhancements and put up additional collateral. New World didn't respond to a request for comment. The developer has put about 40 of its properties into the refinancing's collateral pool, including its headquarters, New World Tower, as well as a second ranking mortgage on its commercial complex on the city's waterfront, Victoria Dockside. The deal also carries a letter of comfort from Chow Tai Fook Enterprises. Once closed, the deal would grant New World some short-term reprieve. But strains will persist. Attention is now shifting to whether the builder will be able to raise an additional HK$15.6 billion via a loan secured by the first ranking mortgage on Victoria Dockside. Part of the proceeds raised would repay the completed refinancing, Bloomberg News previously reported. Separately, for the bond interest payments, the developer owes HK$11.5 million for the coupon payment on a 4 per cent Hong Kong dollar note, followed on Monday by HK$36.7 million on a 4.89 per cent security and HK$24 million on a 4.79 per cent one, according to Bloomberg calculations. Those obligations are on regular bonds that don't carry options to push back payments. And New World paid interest on another regular dollar note earlier this month. BLOOMBERG
Yahoo
6 days ago
- Business
- Yahoo
New World gets 100% lender approval for HK$87.5 bil refinancing
New World's refinancing — which would be one of the largest of its kind ever in Hong Kong — marks the end of months-long negotiations for a debt package that would pull it from the brink of default. Distressed Hong Kong builder New World Development Co. has secured written commitments from all banks for a HK$87.5 billion ($14.2 billion) loan refinancing, people familiar with the matter said, bringing it closer to finalising a critical lifeline just days before a deadline. The next procedural step to formally conclude the transaction is for lenders to sign the loan documents, according to the people. They expect that to happen shortly. Documentation showed that if New World didn't achieve a 100% approval by June 30, the deal could fall through as any collateral pledged would be released and bank commitments cancelled. New World's refinancing — which would be one of the largest of its kind ever in Hong Kong — marks the end of months-long negotiations for a debt package that would pull it from the brink of default. The deal would push back HK$63.4 billion of borrowings that were set to come due this year and next, extending the maturities for three years, Bloomberg reported earlier. Controlled by the family empire of Hong Kong tycoon Henry Cheng, New World has faced significant challenges amid a prolonged property downturn in Hong Kong and mainland China, following years of aggressive debt-driven growth. Investors had grown increasingly concerned about the firm's ability to manage its debt, particularly after it decided to delay interest payments on four perpetual notes, triggering a bond selloff. For its HK$24.1 billion in loans due in 2027 and beyond, the maturities would remain the same, but New World will have to add some credit enhancements and put up additional collateral. New World didn't respond to a request for comment outside of business hours. The developer has put about 40 of its properties into the refinancing's collateral pool, including its headquarters, New World Tower, as well as a second ranking mortgage on its commercial complex on the city's waterfront, Victoria Dockside. The deal also carries a letter of comfort from Chow Tai Fook Enterprises Ltd. Once closed, the deal would grant New World some short-term reprieve. But strains will persist. Attention is now shifting to whether the builder will be able to raise an additional HK$15.6 billion via a loan secured by the first ranking mortgage on Victoria Dockside. Part of the proceeds raised would repay the completed refinancing, Bloomberg News previously reported. See Also: Click here to stay updated with the Latest Business & Investment News in Singapore Morningstar data shows five Asian high-yield bonds with most exposure to New World Development group New World's distress worsens after shock delay on bond interest New World Development defers perpetual bond coupon payments Read more stories about where the money flows, and analysis of the biggest market stories from Singapore and around the World Get in-depth insights from our expert contributors, and dive into financial and economic trends Follow the market issue situation with our daily updates Or want more Lifestyle and Passion stories? Click hereError in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
