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Bond Market News
NWD’s Dollar Perps Drop over 2 Points; Replaces CEO, to Sell Sports Park Stake
December 2, 2024
New World Development (NWD) appointed Echo Huang Shaomei as CEO, replacing Eric Ma Siu-cheung after just two months. Ma resigned on November 29 to pursue personal commitments, and the leadership change comes amid NWD’s ongoing debt crisis and family succession issues. Its debt-to-equity ratio of 55% is among the highest in the sector and has raised concerns among investors. Huang is expected to address employees and outline the company’s future direction at an upcoming meeting. NWD recently reported its first full-year loss in two decades. The group posted a loss of HKD 17.1bn ($2.2bn) for the fiscal year ended June, due to several factors including impairments, revaluation losses, and high interest rates.
Separately, NWD has agreed to sell its 75% stake in the Kai Tak Sports Park to Chow Tai Fook Enterprises (CTFE) for HKD 416.7mn ($53.5mn). CTFE, the private holding firm of NWD’s controlling Cheng family, will also assume a HKD 679.9mn ($87.4mn) loan. The Kai Tak Sports Park has been under construction since 2019, and is expected to begin operations in January 2025, but additional financing may be needed, conflicting with NWD’s current deleveraging strategy. As part of its deleveraging strategy, NWD has sold HKD 68bn ($8.7bn) in assets over the last four years and plans to dispose of another HKD13bn ($1.7bn) this fiscal year.
Separately, NWD’s 4.125% Perp fell 2.3 points to 52.3 and its 6.25% Perp fell 2.1 points to 46.8 cents on the dollar.
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