New World seeks asset sale by June to create positive cash flow
The firm is leaning towards disposing of a core asset located in Hong Kong,
[HONG KONG] New World Development is racing to offload at least one asset by the end of June to meet its self-imposed HK$27 billion (S$4.4 billion) sales target and generate positive cash flow, according to people familiar with the matter.
The company told some investors in recent meetings that it is pushing to achieve positive cash flow for the fiscal year ending June, fast-tracking asset disposals to fill a multibillion-US dollar gap in the goal, the people said, requesting not to be named as the information is private.
New World did not disclose a specific asset or transaction size, though some investors estimate the shortfall could be more than HK$8 billion. The firm is leaning towards disposing of a core asset located in Hong Kong, with tepid investor interest weighing on efforts to divest other projects, one of the people said.
The plans are preliminary and could be subject to change, the people added. New World did not immediately respond to a request for comment.
The asset sale has taken on added urgency as the company struggles to advance prolonged and stalled disposal talks. One of Hong Kong’s largest developers, New World – controlled by billionaire Henry Cheng’s family – was pushed to the brink of default last year following a debt-fuelled expansion.
In September, the company said during an earnings call that it was planning to raise HK$27 billion from contracted property development sales and asset disposals by June 2026.
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A record-breaking refinancing deal involving dozens of banks offered temporary relief, but structural pressures remain. The group continues to face depressed property prices, a limited pipeline of new projects, and lingering uncertainty around its retail operations, including a massive mall near Hong Kong’s international airport.
Those pressures have translated into significant cash outflows. New World burned HK$9 billion in fiscal 2025 and HK$23 billion the year before, according to a September note by Zerlina Zeng, head of Asia strategy at CreditSights Singapore. That came after net debt hit 98 per cent of shareholder equity at the end of June, according to Bloomberg Intelligence, underscoring the scale of its balance-sheet strain.
As a result, the firm suspended dividend payments on four outstanding notes since mid-2025, meaning shareholders will not receive distributions until bondholder payments resume.
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To shore up liquidity, New World has pursued multiple avenues. Most recently, it proposed a bond swap that reduced its debt by about US$1.2 billion, following a HK$3.95 billion loan secured against its flagship Victoria Dockside complex.
Asset targets
Potential divestment candidates have included the Cheng family’s high-profile Rosewood Hotel Group, people familiar said in December. The company has also explored selling mainland China real estate projects, including its landmark K11 developments in Hangzhou, Shenzhen and Shanghai.
Progress, however, has been slow. Talks to sell the K11 Art Mall have dragged on for more than a year amid disagreements over valuation, while discussions with Hong Kong’s Airport Authority over the future of the 11 Skies mall remain unresolved.
Other fundraising plans have also faltered. A proposal by the Cheng family to partner with third-party investors to inject capital into New World stalled late last year. Separately, CTF Services, the family’s infrastructure arm, paused the sale of a portfolio of mainland Chinese toll roads valued at about US$2 billion.
One notable exception came in December, when the family agreed to sell its Australian power producer Alinta Energy to Sembcorp Industries in a deal valuing the asset at US$4.3 billion in enterprise value. BLOOMBERG
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