Bain Capital explores potential investment in Hong Kong’s New World

Bain Capital is reportedly exploring a potential investment in Hong Kong's property developer New World Development, according to a Bloomberg report citing unnamed sources. The private equity firm is examining a possible transaction that could involve fresh capital from the company's controlling Cheng family, though discussions are ongoing and may not culminate in a deal.

New World shares experienced volatility in Hong Kong trading following the news, initially rebounding from previous losses before falling later in the session.

The Hong Kong-based developer, which operates residential, office, and retail assets across Hong Kong and mainland China, is grappling with a prolonged downturn in the property market, subdued consumer spending, and higher borrowing costs. New World reported total debt of approximately HKD143bn ($18bn) at the end of June, with some obligations maturing in 2028. To bolster its financial position, the company has pursued asset sales and other strategic measures.

These talks with Bain Capital follow an earlier failed attempt by Blackstone to invest $4bn in New World earlier this year, which collapsed after disagreements over control of the business with the Cheng family. Recently, New World announced its withdrawal from the 11 Skies project with Hong Kong's Airport Authority, resulting in a HKD18.3bn writedown and marking the developer's third consecutive annual loss. Attempts to reach comment from Bain, New World, and the Cheng family representatives were unsuccessful.