New World Development ends airport mall agreement with $2.3 billion charges
A man walks past the headquarters of New World Development at New World Tower, in Hong Kong, China September 27, 2024. REUTERS/Tyrone Siu
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Sept 30 : New World Development said on Wednesday its cash crunch had eased further after expanding a loan facility by around HK$1 billion ($127.45 million) and terminating operating rights for a shopping mall next to the Hong Kong airport.
The Hong Kong property developer, the most heavily indebted among its local peers, has been trying to cut debt, dispose of assets and bolster liquidity amid tight credit conditions and a weak property market.
Here are more details:
• In a filing, New World said its loan facility with Deutsche Bank was increased to HK$4.9 billion from HK$3.95 billion committed in June
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• It also said, in a separate filing, that it will surrender the 11 SKIES shopping mall project to the Hong Kong Airport on April 1, 2027, and provide works and services worth up to HK$1.1 billion for free
• The company booked a net loss of HK$18.3 billion from the termination, including HK$14.7 billion in impairment losses and HK$2.3 billion in early termination costs
• The company logged a net loss of HK$18.3 billion from the termination deed, including impairment losses of HK$14.7 billion and early termination charges of HK$2.3 billion
• The termination charges pushed up New World’s net loss to HK$28.1 billion for the financial year ended June, from a net loss of HK$16.3 billion in the previous year
• Excluding non-cash losses, New World posted core profit of HK$2.2 billion, its first in three years
• CEO Echo Huang said the 11 SKIES charges resolved a major issue and that cash flow should improve significantly in the first half of fiscal 2026/27
($1 = 7.8465 Hong Kong dollars)
Source: Reuters
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