NEW WORLD DEV (00017) rights issue to raise approximately HK$25 billion; CHOW TAI FOOK Enterprises, together with HSBC and DBS Bank, fully underwrites, demonstrating confidence.

NEW WORLD DEV (00017) announced today that the company proposes to conduct a fully underwritten rights issue to raise approximately HK$25 billion (before deducting expenses). This proposed rights issue is one component of the group's comprehensive capital restructuring plan a "combined punch." The rights issue is jointly led and underwritten by controlling shareholder CHOW TAI FOOK Enterprises Limited (CHOW TAI FOOK Enterprises) and HSBC, with DBS Bank also participating, and will be fully underwritten, dispelling earlier inaccurate rumors of a "soft underwriting" and demonstrating full confidence from all parties in the rights issue plan. The entire plan combines the rights issue and a target bank loan arrangement, aiming to restructure the capital structure, enhance liquidity and extend debt maturities, and provide NEW WORLD DEV with clear development space and financial support to unlock the potential value of its business and lay the foundation for creating long-term value. The rights issue is proposed on the basis of 11 rights shares for every 1 existing share held by qualifying shareholders at a subscription price of HK$0.9 per rights share, and will be fully underwritten. The subscription price represents a discount of approximately 26.9% to the theoretical ex-rights price of HK$1.23 per share. The rights issue is subject to the fulfillment of certain conditions, including obtaining the required independent shareholders' approval, being granted a whitewash waiver, and signing binding maturity extension agreements with all lenders under the target bank loans. Dr. Henry Cheng, Chairman and Executive Director of NEW WORLD DEV, said: "This proposed comprehensive capital restructuring plan is an important step in consolidating Shanghai New World's financial foundation. By combining equity fundraising with extending debt maturities, we aim to give the business greater flexibility to realize asset value in an orderly manner. CHOW TAI FOOK Enterprises' commitment to fully subscribe for its rights entitlement and provide further underwriting support demonstrates its confidence in NEW WORLD DEV's long-term prospects." NEW WORLD DEV stated: "Our top priority is to rebuild financial resilience through rigorous execution and establish a more sustainable foundation for long-term shareholder value: accelerating residential sales and cash collection, advancing asset disposals, enhancing investment property performance, and strictly controlling costs and capital expenditure. The proposed transactions will give us greater flexibility to implement these priorities and unlock the potential of our property portfolio and development project pipeline." The announcement stated that the proposed comprehensive capital restructuring plan aims to support the company's four mutually reinforcing business priorities: Accelerating residential sales and development: advancing sales of existing residential projects, accelerating agricultural land rezoning and development in the Northern Metropolis, and selectively capturing opportunities in fast-turnover development projects, developing jointly with partners where feasible. Orderly asset disposals: recycling capital through the sale of mature assets, government land resumption, and the proposed spin-off and listing of a China public commercial real estate investment trust (C-REIT), while avoiding forced sales of assets at low prices due to funding pressure. Maximizing investment property cash flow: optimizing lease arrangements and tenant mix, improving operational efficiency, and accelerating the operational performance of newly completed and soon-to-be-completed properties. The company will not commit significant capital expenditure to new investment property projects in the near term. Orderly deleveraging to strengthen financial prudence: driving debt reduction and lowering interest costs through the proposed transactions, operational strategies, and continued rigorous operational management.