New World Development Makes Strategic Shift With New CEO – Selling Assets to Tackle Debt

New World Development (NWD) has divested its interest in Hong Kong’s largest sports infrastructure project, Kai Tak Sports Park (KTSP), to its parent company, Chow Tai Fook Enterprises (CTFE). The move marks a significant step in NWD’s ongoing efforts to reduce its financial burden following a historic loss.

In a recent filing, NWD disclosed that it had transferred its entire equity stake in New World Sports Development, the entity behind KTSP, to CTFE for $53.5 million. The transaction also included the handover of a related loan worth approximately $87.4 million.

The Culture, Sports and Tourism Bureau (CSTB) has approved the deal. In a government statement, CTFE reaffirmed its commitment to allocating necessary resources to ensure the project’s smooth construction and operational management in collaboration with the authorities.

Facing mounting financial pressure, NWD reported a record $2.5 billion annual loss in September—the most significant since its founding by Cheng Yu-tung in 1970. To stabilize its finances, the company has aggressively pursued asset sales. This June, it offloaded a 30% stake in the Shenzhen Qianhai Chow Tai Fook Finance Centre’s north tower to CTFE for $199 million. Earlier, it sold Dthe -Park Shopping Centre and parking facilities in Tsuen Wan to Chinachem Group for $520 million.

Despite these efforts, NWD’s debt stood at $15.9 billion as of June, with a net gearing ratio of 55%, positioning it among Hong Kong’s most heavily leveraged property developers. The company is slated for removal from the Hang Seng Index next month.

To mitigate its debt load, NWD has set a target to reduce its gearing ratio to below 40% by 2027. Recent measures include over $2 billion in loan arrangements and repayments in July and August, as well as the early repayment of $4.5 billion through discounted buybacks of foreign-currency bonds.

The Cheng family, with a 45.2% stake in NWD and an estimated net worth of $22.1 billion, remains a central force behind the company. Following the record loss, former CEO Adrian Cheng Chi-hong, a third-generation family member, stepped down unexpectedly in September. He was succeeded by Eric Ma Siu-cheung, the company’s chief operating officer.

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