Shares of Hong Kong's New World Development suspended amid reports CEO to be replaced (updated)

New World Department Store China

26/09/2024 02:29

(Adds details from paragraph 4 onward)
       HONG KONG, Sept 26 (Reuters) - Shares of Hong Kong's New
World Development  0017.HK  were suspended from trading on
Thursday after media reports that CEO Adrian Cheng, the third
generation scion of the tycoon family, will be reassigned to a
non-executive role.
    Trading in shares of subsidiary New World Department Store
China  0825.HK  was also suspended.  
    The major Hong Kong property developer is due to announce
its earnings for the financial year ended in June at 0830 GMT on
Thursday. The company has flagged a net loss of as much as HK$20
billion ($2.57 billion) for the period.  
     New World Development is considering replacing Cheng after
writedowns that led to the company's first annual loss in two
decades, Bloomberg News first reported on Wednesday.
    Media outlet HK01 reported Cheng, who currently is also the
executive vice chairman, will become non-executive vice
chairman, while chief operating officer Eric Ma will replace him
as CEO.
    The company did not respond to a request for comment on the
media reports. 
    The Cheng family is one of the most powerful in the
financial hub, after late billionaire Cheng Yu-tung built a
conglomerate spanning from infrastructure to transports, and
retail to insurance.    
    Adrian Cheng, 44, took over the top job at New World from
his father, Henry Cheng, in 2020, and expanded its business
quickly in both Hong Kong and mainland China, building many
large-scale projects including flagship K11 shopping malls and
offices with his passion for art and culture. 
    However, hit by the pandemic and faced with a prolonged
slump in retail markets and surging interest rates, the
developer's gearing ratio ballooned to among the highest of its
peers, worrying investors who have already lost billions of
dollars from defaults by Chinese property developers.
    New World said this month it expected core operating profit
from continuing operations to fall as much as 23% due to a lack
of revenue, with fair value and impairment losses of as much as
HK$9.5 billion.
($1 = 7.7866 Hong Kong dollars)

 (Reporting by Clare Jim and Donny Kwok; Editing by Anne Marie
Roantree, Muralikumar Anantharaman and Jamie Freed)
 ((clare.jim@thomsonreuters.com;))