On 29 April 2015, New World Development Company Limited (“NWD”, “The Group” or “The Company”) and its subsidiaries entered into the agreements with HIP Company Limited (“HIP”), a wholly-owned subsidiary of The Abu Dhabi Investment Authority (“ADIA”), with a view to establishing a new joint venture company to jointly own Grand Hyatt Hong Kong, Renaissance Harbour View and Hyatt Regency TST (the “Hotels”) with effect from the closing of the transaction.
The total consideration for the sale and transfer of the Hotels is HK$18,500 million, out of which approximately HK$10,082 million will be received by NWD. The proceeds received by the Company will be used for financing its development projects, land bank expansion and other general working capital purposes.
Dr Adrian Cheng, NWD’s Executive Vice-Chairman noted: “We are very pleased with this new joint venture and are looking forward to the beginning of what we hope is a long term relationship and opportunities to do more together with the new partner.”
“The transaction offers the best of both worlds for NWD shareholders: we continue to retain a long term interests in these prime hotel assets in Hong Kong whilst at the same time recycling capital to pursue other value enhancing investments. The transaction is also consistent with NWD’s strategy to effectively allocate resources throughout the Group.” Dr Adrian Cheng added.
The closing of the transaction is subject to a number of customary conditions being fulfilled, including the completion of the pre-Closing reorganisation and entry into the Joint Venture Company Debt Facility. After the completion, the Hotels will cease to be subsidiaries of NWD and the financial results of the Hotels will be accounted as joint ventures of the Group using equity method of accounting.
New World Development Company Limited
New World Development Company Limited (Stock code: Hong Kong Stock Exchange 0017) is a leading brand based in Hong Kong focusing on property development, property investment and hotels. The Group was founded in 1970 and publicly listed in Hong Kong in 1972. It is a constituent stock of the Hang Seng Index with a total asset value of HK$378.5 billion as at 31 December 2014.