New World Development ends airport mall agreement with $2.3 billion charges

Sept 30 : New World Development said on Wednesday its cash crunch had eased further after expanding a loan facility by around HK$1 billion ($127.45 million) and terminating operating rights for a shopping mall next to the Hong Kong airport.

The Hong Kong property developer, the most heavily indebted among its local ​peers, has been trying to cut debt, dispose of assets ⁠and bolster liquidity amid tight credit conditions and a weak property market.

Here are more details:

• In a filing, New World said its loan facility with Deutsche Bank was increased to HK$4.9 billion from HK$3.95 billion committed in June

• It also said, in a separate filing, that it will surrender the 11 SKIES shopping mall project to the Hong Kong Airport on April 1, 2027, and provide works and services worth up to HK$1.1 billion for free

• The company booked a net loss of HK$18.3 billion from the termination, including HK$14.7 billion in impairment losses and HK$2.3 billion in early termination costs

• The company logged a net loss of HK$18.3 billion from the termination deed, including impairment losses of HK$14.7 billion and early termination charges of HK$2.3 billion

• The termination charges pushed up New World's net loss to HK$28.1 billion for the financial year ended June, from a net loss of HK$16.3 billion in the previous year

• Excluding non-cash losses, New World posted core profit of HK$2.2 billion, its first in three years

• CEO Echo Huang said the 11 SKIES charges resolved a major issue and that cash flow should improve significantly in the first half of fiscal 2026/27

($1 = 7.8465 Hong Kong dollars)