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Negotiations between Blackstone and New World Development have slowed due to the Cheng family's insistence on retaining control of the Hong Kong developer. Blackstone proposed investing around USD 2.5 billion, while the family would contribute USD 1-1.5 billion. The Chengs are exploring alternative funding options without giving up their majority stake and have spoken to several financial institutions. New World, the most indebted developer among its peers, is seeking ways to refinance debt and enhance liquidity amid a weak office market, while also attempting to sell assets like the K11 Art Mall.
Negotiations between Blackstone and New World Development have hit a standstill, as the Cheng family resists giving up control of the Hong Kong property developer, according to people familiar with the matter. Blackstone had proposed an investment of around USD 2.5 billion into a special-purpose vehicle, which would make it the largest shareholder of New World. The Cheng family was expected to contribute between USD 1 billion and USD 1.5 billion. Advertisement
The discussions have slowed as the family explores alternative ways to raise capital without relinquishing control. They have been speaking with several financial institutions to sell an equity stake, with Blackstone emerging as the most advanced potential partner, a source told Reuters. Any investor would need to align with the family's strategic interests, and a full change of control is considered unlikely.
The Cheng family, through their private conglomerate Chow Tai Fook Enterprises, owns 45.24% of New World Development and has historically maintained a strong grip on the company. As one of Hong Kong's wealthiest dynasties, the family has kept control central to the group's long-term strategy.
New World Development is the most heavily indebted property developer among its peers and has been seeking ways to refinance debt and strengthen liquidity, especially amid tighter credit conditions and a sluggish office market in Hong Kong. With no immediate debt maturities, the family aims to bring in an equity investor to ease financial pressure.
The company has also been negotiating to sell assets, including the K11 Art Mall in Kowloon, but has yet to finalize any deals. Its shares, valued at roughly USD 3 billion, have risen about 26% so far this year.
Blackstone declined to comment on the negotiations, while New World Development did not immediately respond to requests for statements.
Source Reuters
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