New World Development forecast to raise US$1b from hotels spin-off
Separate listing for hospitality assets seen as part of succession plan for family-run group
New World Development is expected to raise US$800 million to US$1 billion from the spin-off of its hospitality assets.
Bloomberg quoted two people with knowledge of the matter as saying the developer might seek as much as US$1 billion from the spin-off, which is expected to be completed in the second or third quarter.
The company has appointed Deutsche Bank, HSBC, JP Morgan Chase, BOC International and Standard Chartered to handle the sale.
Most of the assets to be spun off are in Hong Kong.
The company was unavailable to comment on the reports yesterday.
Last Friday, the developer announced it was considering the possibility of spinning off certain hospitality assets.
CLSA said the spin-off could form a separate vehicle for funding if the company expanded its hotel portfolio, which requires heavy capital expenditure and a longer payback period.
The brokerage said the spin-off was probably part of a succession plan and a natural course of development for the group.
The hotel group is headed by executive director Sonia Cheng Chi-man, the daughter of group chairman Henry Cheng Kar-shun.
"[New World's] core operations remain intact and there is a more clear focus with the company virtually just the Hong Kong residential, commercial development and rental [operations], with other operations under listing vehicles," it said.
It said there would be a limited earnings impact on the group given the small contributions at the moment. But the group might declare a special dividend for investors.
In June last year, New World had investments in 16 hotels with 7,235 rooms in Hong Kong, mainland China and Southeast Asia. The hotels included the Grand Hyatt and Renaissance Harbour View in Wan Chai and Hyatt Regency in Tsim Sha Tsui.
New World shares closed 0.14 per cent firmer at HK$14 yesterday.
Skyworth Digital yesterday announced it had submitted a plan to spin off its business in manufacturing, assembling and sale of LCD modules.
Shares in the subsidiary - Skyworth Display Technology - will be offered through an initial public offering in Hong Kong and an international placing to professional and institutional investors.