Hong Kong

Hong Kong’s property downturn is taking a growing toll on New World Development Co., the firm owned by the billionaire Cheng family, Bloomberg News reported. The company said late on Friday it expects to post a loss of as much as HK$20 billion ($2.6 billion) for the financial year ended in June — its first annual loss in two decades. Its share price plunged 13% on Monday to the lowest level since 1986, when Bloomberg started tracking the data.

A Hong Kong court on Wednesday dismissed a petition to liquidate Chinese education firm XJ International Holdings Co., dealing a blow to a group of bondholders that includes some of Asia’s most prominent hedge funds, Bloomberg News reported. Deputy High Court Judge Doreen Le Pichon threw out the wind-up petition on technical grounds, saying that XJ had shown there is a dispute that a put option hadn’t been properly exercised, according to a judgment dated Aug. 28 posted on the judiciary’s website.

Banks are expected to take more enforcement actions on distressed buildings amid Hong Kong’s property market downturn, according to PricewaterhouseCoopers LLP, Bloomberg News reported. That’s based on the estimate of the firm’s partner Christopher So, whose team oversees a portfolio of real estate under receivership valued at more than HK$10 billion ($1.28 billion). “Lenders tend to give borrowers some breathing space at the beginning.

Defaulted builder Sino-Ocean Group Holding Ltd. is working to garner enough support to help secure approval for its debt restructuring plan, but remains far short of the needed backing amid opposition from a key bondholder group, Bloomberg News reported. The company has support from a lender group representing about half of the company’s so-called Class A debt, Sino-Ocean said in a Thursday filing with the Hong Kong stock exchange. Lenders have either entered into a restructuring support agreement or are going through internal procedures to obtain the relevant approvals to do so.

A Hong Kong court gave Chinese property developer Kaisa Group a seven-week respite on Monday to finalise a debt restructuring plan, adjourning a hearing on a liquidation petition for what it said could be the last time, Reuters reported. The High Court adjourned the hearing to Aug. 12 after the petitioner representing a key group of bondholders agreed to Kaisa's request for more time. The Shenzhen-based developer has been working to restructure its offshore debt since defaulting on $12 billion in offshore debt payments in late 2021.

Doing business in Hong Kong increasingly comes with a new risk: the political cost of upsetting Beijing. Chinese clients recently dropped one big Chicago law firm after it recused itself from a politically sensitive case, the New York Times reported. A former Wall Street banker was muzzled for writing a “Hong Kong is dead” column. And Google was effectively cornered into enforcing a ban on a popular protest anthem. In all areas of life, Hong Kong is hewing closer to mainland China, blurring distinctions that once cemented the city’s status as mostly free from the politics of Beijing.

Hong Kong’s securities regulator has started criminal proceedings against hedge fund management firm Segantii Capital Management, the firm’s founder and a former trader over insider dealing, the Wall Street Journal reported. The city’s Securities and Futures Commission said Thursday that it had begun proceedings against Segantii founder Simon Sadler and Daniel LaRocca, a former trader for the firm. It said no plea was taken by defendants in an appearance before a Hong Kong court, with the case subsequently adjourned to June 12.

Distressed developer CIFI Holdings Group Co. said it has reached an agreement with a key creditor group on some terms of a restructuring plan that could cut the principal on its debt by as much as 85%, a reversal from the company’s expectations of “no haircut” a year ago, Bloomberg News reported. Shanghai-based CIFI’s latest proposal involves reducing debt by around $3.3 billion to $4 billion, while asking bondholders to swap existing debt for new notes with tenors ranging from two to six years, according to a Hong Kong exchange filing dated April 29.

Hong Kong developer Lai Sun Development Co. is considering options for a planned office tower in the City of London, including a potential sale of a stake in the project, Bloomberg News reported. The group has appointed Eastdil Secured and DBS Group Holdings Ltd. to advise on finding a partner for the 100 Leadenhall Street project, according to people with knowledge of the appointments. The financial advisers are currently undertaking due diligence on the project and could seek a funding partner later in the year or in early 2025.

Hong Kong has taken a bold step to ease a real-estate slump, scrapping a series of property taxes in an effort to turn around a market that is often seen as a proxy for the city’s beleaguered economy, the Wall Street Journal reported. The government has removed longstanding property taxes that were imposed on nonpermanent residents, those buying a second home, or people reselling a property within two years after buying, Financial Secretary Paul Chan said in his annual budget speech on Wednesday.