The proposed arrangement would require unanimous approval from participating lenders and could facilitate a rights issue intended to strengthen the heavily indebted company’s finances, according to people familiar with the private negotiations.
New World is considering repaying approximately 10% of the loan principal as part of the extension, with a target of completing the arrangement before January. That would represent roughly HK$8.8 billion in repayments, although the proposed terms remain subject to negotiations.
Discussions are at an early stage, and the conditions could change before any agreement is reached. There is no certainty that the banks will approve the extension or that the company will proceed with a subsequent equity fundraising.
The negotiations follow months of efforts by the Cheng family, New World’s controlling shareholder, to develop a financial support package for the property group. A potential rights issue or share placement could be announced as early as November, provided the necessary arrangements are finalised.
A rights issue would allow existing shareholders to purchase additional shares, usually in proportion to their holdings. Such a transaction could provide fresh capital without immediately increasing the company’s borrowing, although shareholders declining to participate would face dilution.
The proposed loan extension concerns financing arranged in 2025 through one of Hong Kong’s largest corporate refinancing transactions. That agreement followed prolonged negotiations with creditors as New World sought to avert a potential default and manage substantial repayment obligations.
Under the earlier restructuring, lenders agreed to extend the maturity of approximately HK$63.4 billion in borrowings originally due in 2025 and 2026 by three years. Loans maturing from 2027 onwards retained their original repayment dates, subject to additional credit protection and collateral requirements.
A further two-year extension would give the developer additional time to manage repayments while pursuing equity financing and asset disposals. The precise maturity schedule and interest terms of any revised arrangement have not been publicly established.
New World’s latest financial disclosures underline the importance of securing lender support. Total debt stood at approximately HK$143.3 billion at the end of June 2026, down HK$2.7 billion from the previous financial year.
Net debt nevertheless increased by HK$6.2 billion to HK$126.3 billion, while the company’s net gearing ratio rose to 68.3% from 58.1%. The figures indicate that its balance sheet remains under pressure despite efforts to reduce gross borrowings.
The group reported approximately HK$17 billion in cash and bank balances and HK$15.8 billion in undrawn banking facilities at the financial year-end, giving it total capital resources of about HK$33 billion.
Those resources provide liquidity for operations and financial commitments, but they are considerably smaller than the outstanding debt burden. Access to banking facilities also remains subject to their contractual conditions.
New World’s annual revenue declined to approximately HK$20 billion from HK$27.7 billion a year earlier. However, core operating profit increased to HK$7.7 billion from approximately HK$6 billion, reflecting an improvement in underlying operating performance.
The company reported HK$2.23 billion in net profit from recurring operations, compared with a HK$1.23 billion loss in the preceding year. Gross financing costs fell 15% to HK$6.3 billion.
Its board decided against paying a final dividend for the financial year ended June 30, preserving resources as management continued its financial restructuring programme.
Alongside discussions with banks, New World has pursued exchanges of outstanding securities to lengthen its repayment profile. On October 14, the company indicated that it expected to issue approximately $189.1 million in new secured notes maturing in 2032 following the early results of a debt exchange offer.
The developer has also been restructuring property commitments. At the end of September, it announced arrangements to surrender its operating rights for the 11 SKIES commercial development near Hong Kong International Airport.
The agreement involves a HK$2.3 billion termination payment to the Airport Authority and additional works and services obligations, with the latter subject to a specified cost ceiling.
For the financial year ended June, New World recorded approximately HK$29.6 billion in attributable contracted sales from property developments and asset disposals. Hong Kong accounted for approximately HK$22.1 billion, with mainland China contributing the remaining sales.
The company also reduced capital expenditure by 6% to HK$11.8 billion during the financial year.
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