People familiar with the matter say New World Development has begun approaching banks about extending an about HK$88 billion loan by two years. As part of the pitch, the company would repay 10% of the principal and is aiming to finish the process by January.
Those people added that every lender would need to agree to the extension plan before a rights issue could proceed. They also said the discussions are ongoing, terms may shift, and the deal could still fall apart. New World did not reply right away when asked for comment.
The loan was finalized as part of a record Hong Kong debt-refinancing completed in 2025, the culmination of months of negotiations that kept the company from nearing default. That agreement delayed about HK$63.4 billion of borrowings that had been due in 2025 and 2026 by three years. Debt maturing in 2027 and later kept its original timetable, but New World provided extra credit enhancements and collateral.
New World reported a $3.6 billion loss for its most recent fiscal year. At the end of June, total debt stood at about HK$143 billion, with some maturities in 2028. Earlier this month the firm launched a bond exchange offer covering roughly $991 million, though early-bird participation came in below its stated cap.
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People say the developer is weighing a rights issue that may be revealed as early as November, enabling current shareholders to purchase additional stock according to the size of their holdings. The billionaire Cheng family that holds control of New World has been weighing equity injections for months, and pursuing a rights issue would signal clear backing.
New World has also been exploring deals to improve liquidity. Bain Capital is studying a potential investment that could include fresh funds from the Cheng family. Earlier this year, Blackstone Inc. pulled out of a proposed $4 billion partnership after the Cheng family declined to relinquish control.
Separately, Hong Kong's Airport Authority agreed to waive billions of dollars of rent tied to New World's 11 Skies project by the airport, and under the deal the authority would assume full control of the HK$18 billion mall and office complex, while New World would provide HK$3 billion in cash and services.
The company's projects in Hong Kong and mainland China have been squeezed by softer home prices, weak consumer sentiment, and higher interest rates, which have pressured revenue and raised borrowing costs. The bottom line: watch three swing factors for the runway ahead - unanimous lender consent on the extension plan, details of any rights issue, and participation in the bond exchange.
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