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New World Development has secured a substantial term loan of HKD 5.9 billion (USD 758.62 million) from Deutsche Bank to support its financing needs. The facility includes an initial tranche of HKD 3.95 billion and is backed by a first-priority mortgage on Victoria Dockside, although the property can still be used for further financing. Despite refinancing USD 11.24 billion earlier this year, the company seeks additional funding to manage debt and sustain operations in a weak property market. Its debt issues stem from past expansion, Hong Kong's unrest, the pandemic, and a prolonged real estate slump.
Hong Kong-based property developer New World Development has secured a term loan facility of up to HKD 5.9 billion (USD 758.62 million) from Deutsche Bank AG, a German multinational investment bank. The company had earlier confirmed that it was in discussions with the bank regarding this financing arrangement. Advertisement
The facility includes an initial committed tranche of HKD 3.95 billion, which will be used for the company's routine financing and operational activities. The loan is secured by a first-priority mortgage on the Victoria Dockside property and associated assets. New World can also continue to use Victoria Dockside as collateral to obtain additional funding to meet future business needs.
Earlier this year, the company completed a significant refinancing package of USD 11.24 billion. Despite this, it still seeks further financing to manage debt levels and maintain smooth operations in Hong Kong's subdued property market. Analysts and investors are monitoring the company's debt closely, noting that its financial challenges could reflect broader vulnerabilities in the local real estate sector, similar to the market crisis seen in mainland China in 2021.
New World's debt issues originate from an aggressive expansion strategy in the past, which coincided with political unrest in Hong Kong, disruptions caused by the COVID-19 pandemic, and an extended period of weakness in the real estate market. The company's reliance on key assets like Victoria Dockside as collateral highlights the ongoing need to balance growth ambitions with financial stability.
Source Reuters
5th Jun, 2025
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