Insiders: The Cheng family is considering a rights issue or share placement to inject HK$31.2 billion into New World.

Sources revealed that the Zheng family, the controlling shareholder of New World Development, is considering injecting capital into the company through a rights issue. The sources stated that because the Zheng family is unwilling to give up control, negotiations with Blackstone Group for funding have reached a deadlock. The family is currently confident that the property market in Hong Kong will accelerate its recovery, reducing the urgency to introduce strategic investors at this time, and therefore they can be more selective in choosing investors. The sources indicated that one of the options being considered is a rights issue or a share placement to raise $4 billion. If a share placement is chosen, it would require the Zheng family, which currently holds approximately 45% stake, to contribute around $1.8 billion. Currently, all negotiations for the various options are in the preliminary stages, and details including the size of the investment may be subject to change.