Latest news with #EchoHuang
Reuters
21-05-2025
- Business
- Reuters
New World drags Hong Kong banks into a loan tango
HONG KONG, May 21 (Reuters Breakingviews) - HSBC (HSBA.L), opens new tab and its fellow lenders have a task ahead of them with New World Development ( opens new tab. The money-losing Hong Kong property group wants to refinance $11 billion of loans, but CEO Echo Huang has yet to reverse a four-year revenue slump, opens new tab. The banks have to weigh up the borrower's problems against the pain a default could inflict on the rest of their property exposure in the city. The shrinking top line forced the troubled developer to report its first net loss in two decades last year. There's likely to be a repeat this year: in February, less than three months after taking over as CEO, Huang had to unveil a six-month net loss of HK$6.6 billion ($852 million) as the continuing property slump and high interest costs ate into its bottom line. Its total debt amounted to HK$146 billion by the end of 2024, against HK$22 billion of cash. Over the past couple of years, as the Federal Reserve was raising interest rates, banks had been calling in property loans. That prompted the city's regulators to step in with relief measures for borrowers, especially those from small and medium enterprises. Dealing with a well-connected corporate giant like New World is a different affair. Blue-chip developers and the families who control them have ranked as local banks' most important clients for decades. Sonia Cheng, daughter of New World Chair Henry Cheng, sits on the board of HSBC's Asia-Pacific subsidiary as an independent non-executive director. The bank run by Georges Elhedery had more than $33 billion in Hong Kong commercial property loans on its books at the end of 2024. Some $3.2 billion of such debt was classified as credit impaired as of June last year, a six-fold jump in six months. Elhedery, though, told his shareholders in February that future credit losses on it were unlikely to be big. Nonetheless, a default by New World, one of the traditional big four developers of the finance hub, would send shockwaves to investors and jar lenders' property exposure further. The good news is the property market outlook has improved as interest rates are easing. This week, Hong Kong's one-month interbank rate dipped below 1% for the first time in three years. HSBC and Bank of China ( opens new tab have pledged to take part in New World's refinancing deal, per Debtwire, one of the biggest of its kind in Hong Kong's corporate history. How this saga unfolds will affect not just New World's creditworthiness but also the general health of Hong Kong's economic pillar. (Corrects paragraph four to state that Sonia Cheng sits on the board of HSBC's Asia-Pacific subsidiary.)
Bloomberg
03-03-2025
- Business
- Bloomberg
New World Shares Rally After CEO Pledges to Sell Non-core Assets
Shares of New World Development Co. rose the most in five months, after the company's chief executive officer pledged to cut costs and sell HK$26 billion ($3.3 billion) in assets. Echo Huang, who took over as CEO in November, set out key measures to improve the company's cash flow in a media briefing on Friday, including plans to offload non-core assets, cut costs and improve rental returns.
Reuters
28-02-2025
- Business
- Reuters
New World Development reports $852 million first-half net loss
HONG KONG, Feb 28 (Reuters) - New World Development ( opens new tab, one of the biggest property developers in Hong Kong, reported an interim net loss of HK$6.63 billion ($852.45 million) on Friday, following a prolonged property downturn and high interest costs. The developer has struggled with a limited cashflow for the last three years and financial markets are nervous any deepening of its debt problems could trigger a crisis reminiscent of the one in mainland China that started in 2021 and led to scores of company defaults. Investors are keen for an update from new CEO Echo Huang on the company's progress in its plans for deleveraging, debt repayment and asset disposal. New World has undergone two CEO changes in two months. Adrian Cheng, the third-generation scion of the founding family, resigned in September, raising concerns over its corporate governance. The net loss for the first half ended in December, which counts only continuing operations, is mainly driven by impairment and fair-value losses. That compares to a HK$502 million net profit a year ago and follows a record HK$11.8 billion net loss for the full 2023/2024 financial year. New World flagged the loss last week. Hong Kong developers enjoyed decades of growth until the property market, a pillar of the economy, was hit by a series of crises, including anti-government protests in 2019, COVID-19 and a slow economic recovery. New World's market value has shrunk to about $1.5 billion from $14 billion in mid-2019. Higher interest rates are also hitting it harder than its peers because it has some of the highest net gearing in the sector, at 85% at end-June, following its rapid expansion in both Hong Kong and mainland China before the pandemic. The developer had a total of HK$151.6 billion of loans and bonds outstanding as of end-June, with HK$41.6 billion of the debt due by June this year, while its cash level was HK$28 billion. It also had HK$36.3 billion of perpetual bonds, which typically pay more expensive rates. The perpetual bonds are trading at between 28 to 56 cents on the dollar, reflecting an imminent default or a bond restructuring. Its 6.25% perpetual bond has a $40.6 million coupon payment due on March 7, and the $345 million, 6.15% notes will have their coupon reset to around 10.5% if New World does not redeem the securities by June 16 this year. ($1 = 7.7776 Hong Kong dollars)
Yahoo
28-02-2025
- Business
- Yahoo
New World Development's debt repayment in focus amid $875 million expected H1 loss
By Clare Jim HONG KONG (Reuters) - Hong Kong's New World Development, which has been battling liquidity stress for the past three years, is set to report an interim net loss of up to $875 million on Friday, hurt by a prolonged property downturn and high interest costs. Investors are watching to see whether the deepening debt woes of New World, one of the biggest property developers in Hong Kong, could spiral into a sector crisis reminiscent of the one in mainland China that started in 2021 and led to scores of company defaults there. They also want an update from new CEO Echo Huang on the firm's progress in its plans for deleveraging, debt repayment and asset disposal. New World has undergone two CEO changes in two months, with Adrian Cheng, the third-generation scion of the firm's founding family, stepping down in September, raising concerns over its corporate governance. The estimated net loss for the first half ended in December, which counts only continuing operations, was flagged by the firm last week and is driven by impairment and fair-value losses. That compares to a HK$502 million ($64.57 million) net profit a year ago and follows a record HK$11.8 billion net loss for the full 2023/2024 financial year. Hong Kong developers enjoyed decades of growth until the property market, a key pillar of the economy, stumbled from one crisis to another, including anti-government protests in 2019, COVID-19 and a slow economic recovery. New World's market value has shrivelled to about $1.5 billion now from $14 billion in mid-2019. It is also suffering from a hike in interest rates more than its peers because it has among the highest net gearing in the sector, at 85%, due to its rapid expansion in both Hong Kong and mainland China before the pandemic. The developer had a total of HK$151.6 billion of loans and bonds outstanding as of end-June, with HK$41.6 billion of the debt due by June this year, while its cash level was only at HK$28 billion. It also had HK$36.3 billion of perpetual bonds, which typically pay more expensive rates. Its 6.25% perpetual bond has a $40.6 million coupon payment due on March 7, and the $345 million, 6.15% notes will have their coupon reset to around 10.5% if New World does not redeem the securities by June 16 this year. ($1 = 7.7737 Hong Kong dollars) Sign in to access your portfolio
Reuters
28-02-2025
- Business
- Reuters
New World Development's debt repayment in focus amid $875 million expected H1 loss
HONG KONG, Feb 28 (Reuters) - Hong Kong's New World Development ( opens new tab, which has been battling liquidity stress for the past three years, is set to report an interim net loss of up to $875 million on Friday, hurt by a prolonged property downturn and high interest costs. Investors are watching to see whether the deepening debt woes of New World, one of the biggest property developers in Hong Kong, could spiral into a sector crisis reminiscent of the one in mainland China that started in 2021 and led to scores of company defaults there. They also want an update from new CEO Echo Huang on the firm's progress in its plans for deleveraging, debt repayment and asset disposal. New World has undergone two CEO changes in two months, with Adrian Cheng, the third-generation scion of the firm's founding family, stepping down in September, raising concerns over its corporate governance. The estimated net loss for the first half ended in December, which counts only continuing operations, was flagged by the firm last week and is driven by impairment and fair-value losses. That compares to a HK$502 million ($64.57 million) net profit a year ago and follows a record HK$11.8 billion net loss for the full 2023/2024 financial year. Hong Kong developers enjoyed decades of growth until the property market, a key pillar of the economy, stumbled from one crisis to another, including anti-government protests in 2019, COVID-19 and a slow economic recovery. New World's market value has shrivelled to about $1.5 billion now from $14 billion in mid-2019. It is also suffering from a hike in interest rates more than its peers because it has among the highest net gearing in the sector, at 85%, due to its rapid expansion in both Hong Kong and mainland China before the pandemic. The developer had a total of HK$151.6 billion of loans and bonds outstanding as of end-June, with HK$41.6 billion of the debt due by June this year, while its cash level was only at HK$28 billion. It also had HK$36.3 billion of perpetual bonds, which typically pay more expensive rates. Its 6.25% perpetual bond has a $40.6 million coupon payment due on March 7, and the $345 million, 6.15% notes will have their coupon reset to around 10.5% if New World does not redeem the securities by June 16 this year.
