One-time CEO Adrian Cheng is moving on from New World
Hong Kong’s New World Development on Monday announced the successful refinancing of HK$88.2 billion ($11.2 billion) in offshore debt, as well as the resignation of third-generation scion and former CEO Adrian Cheng from the family-controlled builder’s board of directors.
New World said it had arranged facilities with its banks that allow for more flexibility in payment, including tranches of loans with different maturities, with the earliest maturity date being 30 June 2028, according to a filing with the Hong Kong stock exchange.
Cheng’s resignation as a non-executive director and non-executive vice-chairman took effect Tuesday to allow the 45-year-old “to devote more time on public services and other personal commitments”, the company said in a separate statement. Once seen as the heir apparent to his father, New World chairman Henry Cheng, the son stepped down as chief executive last September after the developer posted its first full-year loss in two decades.
“The board wishes to express its sincere gratitude to Dr Cheng for his contribution to the company during the tenure of his office,” New World said.
Crisis Continues
Adrian Cheng’s exit leaves the New World board with 17 directors. The board’s seven-member executive committee includes the chairman and his daughter Sonia, the group’s hotels boss, as well as Echo Huang, who took over CEO duties from Eric Ma in late November after he served briefly in the role following Adrian Cheng’s resignation from the post.
The developer reportedly sold the 500-key New World Hotel Makati in Manila
Huang is tasked with overseeing a turnaround at New World, which in March posted an interim loss of HK$6.63 billion and vowed to boost cash flow by speeding asset sales and slashing spending. In the latest disposal, the Hong Kong group was reported this week to have sold its 500-key New World Hotel Makati in Manila to Philippine builder Ayala Land.
In a business update released Monday, New World said that property sales efforts in Hong Kong and mainland China were delivering exceptional results, having already achieved the contracted sales target of HK$26 billion for the fiscal year.
The builder noted that its ultra-luxury Deep Water Pavilia project in southern Hong Kong Island had achieved “strong sales” since launch with over 330 units sold, with a top transaction of close to HK$50,000 per square foot. Local press reports last month indicated that New World had priced the south-side project at record-low levels for the area.
Office Project Rejig
In June, New World filed an application to reconfigure a 28-storey commercial project in the heart of Hong Kong’s Tsim Sha Tsui tourist area.
After receiving approval over a year ago to build a combined office, retail and residential tower near Kowloon Park, New World asked permission to rework the eight office floors planned for the development at 43-49A Hankow Road into a 99-room hotel. The move came as the city’s office rents sat at more than 42 percent off their 2019 peak.
New World’s market capitalisation stood at roughly $1.8 billion on Tuesday, down from $14 billion in mid-2019.
