New World’s top shareholder seeking bank loan as equity deal looms: sources

[HONG KONG] Chow Tai Fook Enterprises (CTFE), an investment arm of Hong Kong’s billionaire Cheng family, is seeking about HK$5 billion (US$637 million) in fresh funding from banks, according to people familiar with the matter.

The financing would be a new-money loan and would be used for general corporate purposes, the people said, asking not to be identified discussing private matters. 

The fundraising would provide CTFE, New World Development’s largest shareholder, with a liquidity cushion if it decides to proceed with a broad recapitalisation of the cash-strapped builder.

Such a move could include a rights issue, a mechanism where existing stockholders can buy new shares in proportion to their current holdings, other people familiar with the matter said last month. 

The potential new loan for CTFE could be signed as soon as this month, though details are still under discussion, the people added. 

CTFE and New World didn’t immediately respond to requests for comment.

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The Chengs have been floating capital injection proposals for months as they explore options to support New World. That’s kept investors focused on how CTFE could raise cash to back any transaction.

New World is still reeling from the property downturn in mainland China and Hong Kong and reported a HK$19.7 billion net loss for its latest fiscal year. 

The builder has been seeking approval from its bank lenders to extend by two years about HK$88 billion in loans, which were secured in Hong Kong’s largest ever debt refinancing in 2025. 

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The company plans to repay 10 per cent of the loan principal using proceeds from the equity injection, which it aims to complete by January. 

If a rights issue does go through, it would represent a major sign of direct financial backing from the controlling family for the debt-laden company.

The developer has a market capitalisation of about HK$12.8 billion as of Nov 10, down 88 per cent from its peak in 2019. BLOOMBERG