New World Development sells Hong Kong sports park stake to parent to tackle debt

New World Development (NWD) has sold its stake in Hong Kong’s largest sports infrastructure project to parent Chow Tai Fook Enterprises (CTFE), as the developer takes steps to rein in debt after posting its biggest-ever loss.

NWD sold a 100 per cent equity interest in New World Sports Development, the developer of Kai Tak Sports Park (KTSP), for HK$416.7 million (US$53.5 million) along with a HK$680 million loan to CTFE, the company said in a filing to the Hong Kong stock exchange late on Thursday.

The transaction has been approved by the Culture, Sports and Tourism Bureau (CSTB), according to a separate government statement. “CTFE has assured the government of its commitment to dedicating resources to ensure the smooth construction progress of KTSP and to take forward the operation of the KTSP in partnership with the government,” the statement said.

NWD, which reported a full-year loss of HK$19.7 billion in September – the worst since the late Cheng Yu-tung founded the company in 1970 – has been scrambling to sell assets and manage its debt load.

In June, it sold a 30 per cent stake in the north tower of the Shenzhen Qianhai Chow Tai Fook Finance Centre to CTFE for 1.44 billion yuan (US$199 million). Before that, it sold the D-Park Shopping Centre and car-parking spaces in Tsuen Wan to rival Chinachem Group for HK$4.02 billion.