NWD Secures Bank Funding and Avoids Default
Hong Kong property giant New World Development has secured bank funding, avoiding a default that was expected to send ripples to the city’s financial industry.
New World Development (NWD) has secured HK$88.2 billion ($11.2 billion) in refinancing in what it calls «New Bank Facility and the Aligned Bank Facilities», according to a statement from the property group owned by the billionaire Cheng family.
«We would like to express our sincere gratitude to the banking community for their continued support. This is a testament to the confidence placed in our operation,» said NWD CEO Echo Huang, adding that the group’s financial management strategy is to prioritize reducing indebtedness and improving cash flow while continuing to implement treasury management strategies and adhere to existing financial obligations.
NWD was reportedly facing the risk of defaulting on loans from financial institutions including Bank of China, HSBC, Standard Chartered, Bank of East Asia, Fubon Bank (Hong Kong), Hang Seng Bank, Credit Industriel et Commercial and more. The earliest maturity date amongst the loans was June 30.
NextGen Steps Down
At the same time, third generation descendent of the Cheng family, Adrian Cheng, has stepped down as CEO, effective July 1, to «devote more time to public services and other personal commitments,» according to a filing to the Hong Kong stock exchange.
Under his leadership, NWD posted its first annual loss in two decades, totaling HK$19.7 billion.
