New World Development gets Shanghai bourse nod for US$570 million Reit listing
The move comes as the indebted developer seeks to cut debt, dispose assets and bolster liquidity
New World Development has secured approval from the Shanghai Stock Exchange for the spinoff and listing of its real estate investment trust (Reit) worth an estimated US$570.36 million. This marks the first such listing by a Hong Kong developer. The company plans to subscribe for 20% of the total units, while external investors will take the remaining 80% for a combined worth of 3.05 billion yuan.
As part of the deal, New World will transfer its holding company of Shanghai Hong Kong New World Tower, featuring the K11 Art Mall and K11 ATELIER NWT, to the newly-listed Reit for 4.01 billion yuan. The company anticipates generating net proceeds of 3.24 billion yuan from the asset sale and the acquisition of a 20% stake in the Reit.
Echo Huang, the CEO of New World, stated that the proposed spinoff will provide the group with access to new sources of capital from regional institutional and retail investors. The developer also highlighted that two additional K11 brand assets in Hangzhou and Shanghai are set to be completed soon, which will aid in their strategy to recycle capital, enhance liquidity, and reduce debt.
This listing comes at a time when New World, the most heavily indebted developer among its Hong Kong peers, is striving to alleviate its debt burden, dispose of assets, and improve liquidity amidst stringent credit conditions and a struggling property sector in Hong Kong.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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