JPMorgan says NWD’s controlling shareholder may need to provide liquidity support
The company says it has not ‘received any funding proposal as alleged in the rumours’
But an injection of capital, as suggested by a recent media report, was less likely, the US investment bank said in a report on Tuesday.
NWD stock dropped on Tuesday after the property developer said it had not received a proposal from its controlling shareholder, the billionaire Cheng family, on a capital injection. NWD’s shares fell 2.8 per cent to HK$6.87 at the close on Tuesday after ending Monday 6.8 per cent higher.
“Save that the company is in discussions with respect to a loan facility led by Deutsche Bank as part of the company’s ordinary course financing activities, the company has not received any funding proposal as alleged in the rumours,” NWD said on Monday night.
On Monday, Bloomberg News reported that the family of Hong Kong tycoon Henry Cheng Kar-shun, the controlling shareholder of NWD, was willing to contribute about HK$10 billion (US$1.3 billion) and was seeking a partner that could provide a roughly similar amount for an equity stake. Blackstone and CapitaLand Group were among the firms engaged in the discussions, the report said. The two companies had also been in talks with NWD to buy some of its assets, it added.
JPMorgan said NWD’s clarification did not rule out the possibility of a capital injection in the future, as it only said the company had not received a funding proposal at that point.