New World Says Nothing Signed Yet as Blackstone Said Set to Become Largest Shareholder

New World Development said late Thursday that no agreement has been reached regarding potential investments in the company, after a Bloomberg report hours earlier indicated that Blackstone is nearing a deal to become the embattled developer’s largest shareholder.

Citing discussions with its controlling shareholder, Chow Tai Fook Enterprises Limited, an investment vehicle controlled by the family of tycoon Henry Cheng, New World indicated in a statement to the stock exchange that CTFE said, “it has been approached by several potential investor(s) on possible investment(s) in the Company.”

The statement went on to indicate that no agreement has been reached, and that the amount, nature and form of any potential deal has not yet been decided, while cautioning that no transaction is assured. 

For its fiscal year ended 30 June New World had reported a loss of HK$16.3 billion ($2.1 billion), marking its second straight year of red ink, with reports of the developer’s talks with Blackstone having first surfaced in August of last year. Blackstone declined to comment on the reported discussions when contacted by Mingtiandi.

Restructuring Proposal

The potential deal would see Blackstone work to restructure New World’s finances while the developer continues its efforts to sell off assets to reduce debt, Bloomberg said, citing sources familiar with the discussions. 

New World has set the goal of selling HK$27 billion in assets by the end of June in order to achieve positive cash flow, with the company having been reported to be looking for a buyer for its 11 Skies mall near Hong Kong International Airport since mid-2025.

Last month the Cheng family was reported to have hired advisors to market its Rosewood Hotel in London’s posh Holborn district, in a move seen as an attempt to raise cash. 

During November New World proposed a debt swap in an attempt to refinance $1.9 billion in obligations, however, that programme fell well short of its target. While the debt swap is seen as having helped New World avoid default, the developer is said to still be facing $6.8 billion in bond liabilities. 

The Cheng family currently owns 45 percent of New World, with no indication yet regarding how large of a holding it would be willing to sell to the US private equity giant. 

Asset Acquisition Opportunity

Founded by Henry Cheng’s father, Cheng Yu-tung in 1970 and long one of Hong Kong’s top five developers, New World has suffered as the residential and commercial markets in its two primary geographies have suffered through prolonged downturns.

While the mainland market continues to see challenges, rising housing demand in Hong Kong and signs of stabilisation in commercial asset values could present Blackstone with an opportunity to buy in near what could be the bottom of the market.

The crown jewel of New World’s portfolio is the Victoria Dockside complex in Kowloon’s Tsim Sha Tsui area, which is home to the K11 Musea mall, K11 Atelier office tower and a Rosewood Hotel. In addition to its 16 investment properties in its home city, the company also owns full or partial stakes in 12 mainland China assets.  

Blackstone has a history of buying out developers in Greater China, having attempted a HK$23.7 billion takeover of Beijing-based Soho China in 2021, before that deal was ultimately blocked by mainland regulators.

In 2014 the company led by Trump buddy Stephen Schwarzman acquired 65.5 percent of Hong Kong-listed mainland builder Tysan Holdings in a HK$1.64 billion deal, after having picked up 40 percent of Shenzhen mall developer SZITIC Commercial Property in 2013 in what was reported to be a $400 million deal.