NWD shares jump after market views likely stake sale to Blackstone as positive

Blackstone’s potential acquisition of a stake in New World Development (NWD) will help the embattled Hong Kong-listed developer improve its balance sheet and liquidity, benefiting creditors and shareholders alike, according to analysts. The New York-based private equity giant’s investment in NWD could take the form of “shareholder loans or direct equity financing, as well as offloading noncore investment properties”, said Jeff Zhang, an equity analyst at Morningstar. “That said, uncertainties remain on the deal structure, as the continued rally in NWD’s share price may curb the size of Blackstone’s share purchase.” NWD’s shares rose 4.4 per cent on Friday, taking the gains to nearly 57 per cent this month amid investor speculation about the stake sale. The Cheng family, one of the city’s wealthiest clans, owns 45.33 per cent of NWD. NWD said late on Thursday that its parent, Chow Tai Fook Enterprises (CTFE), had been approached by potential investors after reports that CTFE could sell part of its stake to Blackstone. Bloomberg reported earlier that Blackstone – the world’s biggest asset manager – was in discussion to become the single largest shareholder of NWD, citing people familiar with the matter. Under the proposed arrangement, the US alternative asset manager would lead a restructuring of NWD, with the developer selling assets to improve liquidity. The size of Blackstone’s potential stake was not disclosed, the report said. In a late-night filing to the Hong Kong stock exchange, NWD said it was aware of media speculation about potential new investors and had made inquiries with CTFE, which confirmed it had been approached by several parties. “The market is excited about any possible corporate or shareholders’ action,” Citi said in a note on Friday. “That said, a change in control can also be done via new share issue, rights issue or direct share sale, which could pose downside risk if new equity is raised or in case of a change in company strategies.” Citi said it maintained its sell recommendation on the developer’s stock. The US bank also noted NWD’s “emerging value” as it reduced its debt and Hong Kong’s residential property market recovered. Apart from privatisation, “any corporate action could pose share dilution risk, but it is credit positive, in our view”, Citi said. No agreements had been reached and there was no certainty that any transaction would proceed, the company said. NWD has become Hong Kong’s most indebted developer after years of debt-fuelled expansion collided with a prolonged property downturn. It reported a HK$16.3 billion (US$2 billion) loss in June 2025, widening 38 per cent from a HK$11.8 billion loss a year earlier. The developer has accelerated asset disposals while pursuing debt swaps and bank refinancing. Since the start of 2025, it has sold more than 2,200 residential units, including parking spaces, raising over HK$34.8 billion – its largest cash haul in nearly five years.