Move is aimed at generating cash to invest in projects with higher returns
Having pocketed $405.4 million in the year to June from the disposal of weak infrastructure assets, NWS Holdings is planning to continue the clear-out.
Group financial controller Leslie Cheng said yesterday that NWS - the infrastructure, services and port flagship of New World Development - was in talks with local partners to offload perhaps five underperforming toll-road projects in remote parts of China.
The move was aimed at weeding out laggard assets and generating cash for reinvestment in projects with more attractive returns, Mr Cheng said.
'We want to focus on expressways in bigger cities, which have a higher return,' he said. 'We find the present debt level quite comfortable and can spare more resources on new projects which will help lift our bottom line.'
Return on the equity of the assets to be divested stood at about 5 per cent, much less than the average 13 per cent return of its infrastructure portfolio, he added.
Although he declined to identify the assets in question, they carried a combined book value of about $1 billion, Mr Cheng said.
