Private equity firm Blackstone is close to securing a deal that would make it the largest shareholder of Hong Kong’s property developer New World Development, Bloomberg News reported on Thursday, citing people familiar with the matter.
New World is controlled by the Cheng family, one of Hong Kong’s wealthiest families. Through their private conglomerate, Chow Tai Fook Enterprises (CTFE), the family owns 45.24% of New World, according to LSEG data.
It was not immediately clear how large a stake Blackstone would acquire or what it would pay the Cheng family, the report added.
New World said in its statement that its controlling shareholder, CTFE, had been approached by several potential investors regarding possible investment in the company.
The firm, however, flagged that no agreement has been reached with any parties yet and there was no certainty that any deal would happen.
The company was not aware of any other information that needed to be disclosed, it said in its statement.
The Cheng family’s grip on New World has long been seen as central to the group’s strategy, making any potential investment by a global buyout firm closely watched as the company seeks ways to shore up its balance sheet.
The company, the most indebted among its peers, has been seeking to refinance debt and improve liquidity as the property sector faces sustained pressure from tighter credit conditions and a weak office market.
As of Thursday, New World had a market capitalization of HK$28.01 billion ($3.59 billion), LSEG data showed.
New World’s debt woes trace back to an ambitious expansion spree that collided with Hong Kong’s political unrest, the COVID-19 pandemic and a drawn-out real estate slump.
Blackstone is one of the world’s largest asset managers with over $1 trillion in assets under management.
($1 = 7.8047 Hong Kong dollars)
Reuters
