Hong Kong's New World Development says business 'as usual' amid Bloomberg's coverage of potential default (updated)

Kaisa group

23/01/2025 11:26

(Updates with Bloomberg report throughout)
       Jan 23 (Reuters) - Hong Kong-based New World Development
 0017.HK  faced renewed speculation on Thursday as Bloomberg
reported on a potential bond default, after the property
developer clarified earlier in the day that it continues to
operate normally.
    Bloomberg News reported PJT Partners Inc., a global
advisory-focused investment bank, has discussed with New World's
dollar bondholders the possibilities of a potential bond
default, set off by the developer's ongoing loan talks.
    The company said earlier today it continues business as
usual despite "media rumours" surrounding its operations and
financial obligations.
    This followed a clarification earlier this week that it has
not initiated discussions with creditors regarding a proposal to
restructure its existing debt, addressing market speculations.
    PJT Partners, which is also working with developers like
Country Garden Holdings  2007.HK , Kaisa Group Holdings
 1638.HK , and Logan Group  3380.HK , warned that insolvency
clauses in New World's dollar bonds could be triggered if the
company engages with its bank lenders, according to Bloomberg.
    New World Development, which has the highest debt among its
Hong Kong peers, said it refinanced about HK$17.76 billion 
($2.28 billion) of its bank loans since July 2024.
    However, this is only a fraction of the HK$199 billion debt
it held, as per JPMorgan data from July 2024.
    The property developer has also been facing executive
governance issues, with its former CEO Adrian Cheng of the
group's founding Cheng family stepping down in September.
    Cheng was replaced by Eric Ma, who in turn was replaced just
two months later by Echo Huang - an executive director of the
company and CEO of New World China Land since 2020.


($1 = 7.7898 Hong Kong dollars)

 (Reporting by Sneha Kumar and Roshan Thomas in Bengaluru;
Editing by Varun H K and Vijay Kishore)
 ((Sneha.Kumar@thomsonreuters.com;))