NWD Refinancing Woes Give Hong Kong Banks the Jitters
Major property developer New World Development and numerous lenders in Hong Kong are attempting to complete a historic corporate financing deal.
New World Development (NWD) and more than 50 banks in Hong Kong aim to complete one of the city’s largest-ever corporate refinancing deals, according to a «Bloomberg» report.
Lenders involved include Bank of China, HSBC, Standard Chartered, Bank of East Asia, Fubon Bank (Hong Kong), Hang Seng Bank, Credit Industriel et Commercial and more. Concerns have led to the involvement of risk chiefs and, in some cases, CEOs at the banks. NWD, which is seeking to secure $11 billion, could face demands for immediate repayment if a deal is not reached.
More broadly, banks have been generally facing a rise in non-performing loans from Hong Kong’s commercial real estate sector.
Internal Woes
In addition to refinancing, NWD has also been facing other challenges including its first reported annual loss since 2004 and two CEO changes in two months, including the stepping down of Adrian Cheng, the eldest son of NWD chairman Henry Cheng.
NWD is owned by the Chengs which, according to Forbes, is Hong Kong’s third richest family with an estimated net worth of $19.5 billion. It was founded by Cheng Yu-tung, the late father of Henry Cheng, who ran a successful gold jewelry business through the flagship Chow Tai Fook Jewellery Group.
