NWD will receive cash proceeds of HK$21.75 billion (US$2.8 billion) from the disposal of more than 2.38 billion NWS shares, which accounts for about 60.86 per cent of the issued shares, the company announced.
The company will use a portion of the cash proceeds to pay a special dividend of about HK$4 billion, or HK$1.59 per share, it added.
The disposal will “generate immediate value for shareholders, repositions the company around its property businesses, and supports its broader efforts to reduce leverage in the expectation of persistently high interest rates”, the company said.
“This transaction will streamline NWD’s business and asset portfolio, bringing its future earnings and cash flow profile into greater alignment with its property businesses.”
Assuming the NWS share offer is declared on November 9, NWD expects to receive the payment for the disposal by November 20 and to distribute the special dividend on December 20, the statement said.
Hong Kong property deals at 7-yr low, government rejects all bids at land auction
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Chow Tai Fook Enterprises holds about 45.24 per cent of NWD shares as of Thursday.
NWD’s total borrowings including loans and bonds stood at HK$185.3 billion as of end-June, while it had total cash of HK$54.5 billion, according to the company’s annual report.
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Its net profit slumped 28 per cent to HK$900.9 million in the 2023 financial year, according to its annual report issued in September.
As one of the most indebted developers in Hong Kong, NWD said it expects its net gearing of around 47 per cent to fall to around 42 per cent after the sale, according to a previous filing. Its peers average about 20 per cent.
Forbes estimates the Cheng family’s net worth at US$28.9 billion, trailing Henderson Land scion Lee Shau-kee’ US$30.3 billion fortune and “Superman” Li Ka-shing’s US$39 billion.
Hong Kong property moves may lift deal volumes but price stability is key
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Shares of NWD gained 1 per cent to HK$14.88 on Thursday, while NWS fell 0.2 per cent to HK$9.30.
The Greater Bay Area (GBA) and the Yangtze River Delta markets contributed 91 per cent of NWCL’s revenue in this period, a positive development for its Hong Kong-based parent, which has about 21 per cent of its total assets deployed in the GBA development zone.