【17】New World Falls Nearly 6% Bloomberg: Blackstone and Zheng Family Encounter Negotiation Obstacles

New World Development (00017)
Earlier rumors circulated about seeking funding from Blackstone Group. Bloomberg, citing sources, reported that negotiations between Blackstone and New World faced obstacles because the Cheng family was unwilling to relinquish control. The stock price of New World once dropped nearly 6%, hitting a low of HKD 9, with a daily decline of 1.1%, closing at HKD 9.46, with a turnover of HKD 130 million.

The report indicated that Blackstone proposed to invest approximately $2.5 billion into a special purpose vehicle, making it the largest shareholder of New World Development, while the Cheng family would invest between $1 billion and $1.5 billion. Sources said that recent negotiations have slowed, and the Cheng family is still seeking deals with other investors that do not involve transferring influence.

Sources also stated that Blackstone is trying to resolve contingent liabilities related to long-term rent obligations for the 11 Skies shopping mall, which has become a sticking point in negotiations. Additionally, New World has yet to obtain government approval to reduce or解除 the guarantee rent for its flagship shopping center.

Earlier reports suggested that the Cheng family, the major shareholder of New World, might relinquish control to Blackstone. New World later issued a statement clarifying that Chow Tai Fook Enterprises is still in discussions with potential investors, but no agreements have been reached regarding the amount, nature, or form of any potential investment.

Blackstone’s flagship private credit fund BCRED saw a net outflow of $1.7 billion in the first quarter

Additionally, Blackstone’s flagship private credit fund, with $82 billion in assets under management, Blackstone Private Credit (BCRED), is facing a severe redemption wave. It experienced a net outflow of $1.7 billion in the first quarter, with a record redemption rate of 7.9%, exceeding the quarterly limit of 5%.

Blackstone stated that BCRED is fulfilling all redemption requests for the quarter, consistent with its performance since inception. As of the end of 2025, BCRED still holds approximately $8 billion in available cash and has attracted nearly $2 billion in new commitments.

However, Bloomberg reported that to cope with redemption pressures, Blackstone ultimately resorted to internal financing, mobilizing over 25 senior executives (many from the credit division) to invest about $150 million in BCRED. The firm also used $250 million of its own funds to support the fund.

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