-- New World Development Co. plans to redeem a perpetual bond and complete $1 billion of non-core asset sales as the Hong Kong-based property company tries to revive confidence in its financial health.FedEx Stokes Investors With Hint of a Freight Deal
The developer, controlled by Hong Kong billionaire Henry Cheng’s family, saw its bond prices fall to record lows last year, exacerbating liquidity worries. Those concerns eased in recent months after the Cheng family increased its stake in the developer and the company worked to shore up confidence through bond buybacks and a pledge to optimize its debt profile, though New World’s shares are still trading near an all-time low.
Nonetheless, New World still faces challenges. As Hong Kong’s property sales lose steam due to high interest rates, it may find it difficult to offload homes quickly without significant discounts. It has a project of more than 1,300 units coming to the market soon, at a time when first-hand sales have slowed — transactions plunged by 46% in May from a month earlier despite price cutting by developers.
In total, New World’s investment properties are valued at HK$43 billion and are mostly free of debt, the people added. The average loan-to-value ratio of these assets is expected to be around 40%, though could be as much as 70% for some, the people said.The builder has also refinanced a loan totaling HK$9.5 billion with Abu Dhabi Investment Authority for their joint hotel assets, the company said in a statement on its website Monday.