Hong Kong property developer New World proposes US$3.2 billion rights issue

Published Sun, Nov 15, 2026 · 09:00 PM

[BEIJING] Hong Kong property developer New World Development said on Sunday (Nov 15) that its board has proposed a recapitalisation plan aimed at raising about HK$24.9 billion (US$3.2 billion), according to a company filing.

New World has been trying to cut debt, dispose of assets and bolster liquidity amid tight credit conditions and a weak property market.

The plan offers shareholders 11 rights shares for every existing share at HK$0.90 each, representing a 26.9 per cent discount to the theoretical ex-rights price of HK$1.23 a share. The subscription price also represents an 81.5 per cent discount to the last closing price.

The company plans to use 34 per cent of the proceeds to prepay 10 per cent of about HK$82 billion in bank loans and extend the maturity of the remaining 90 per cent by two years.

It plans to use another third to repay debt including senior notes and deferred distribution of its perpetual securities.

After the rights issue, New World’s net debt to total equity ratio will drop to 48.3 per cent from 68.3 per cent. The developer aims to reduce total debt by between HK$40 billion and HK$50 billion by the end of 2031, to HK$93 billion to HK$103 billion.

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The move comes after Bain Capital decided against investing in the indebted property company. Bain had been exploring a potential investment but turned away after failing to agree on terms, people familiar with the situation said earlier, without elaborating.

The rights issue is part of the distressed developer’s broader effort to shore up liquidity after reporting a record US$3.6 billion loss for the fiscal year. It is also the first concrete sign of support from the family behind New World, which had previously indicated it was willing to back the debt-laden company.

Controlling shareholder Chow Tai Fook Enterprises, which owns about 45.3 per cent of the company, has committed to take up its full entitlement, while the remaining shares will be fully underwritten.

The maximum commitment by Chow Tai Fook is about HK$18.7 billion. The group said it supports New World resuming dividend payments when its financial performance and liquidity permit.

Chow Tai Fook has been seeking about HK$5 billion in fresh funding from banks, people familiar with the matter said this month, a move that would provide some added liquidity for any potential broad recapitalisation of New World.

To extend its maturities, New World announced an exchange offer and cancelled US$199.28 million of its bonds due in 2027 and 2028, below its overall target. Its total debt was about HK$143 billion at the end of June, according to its latest results announcement. A portion of that debt is due in 2028. REUTERS, BLOOMBERG