Embattled Hong Kong developer New World Development (0017) is reported to be close to an agreement that would make Blackstone its largest shareholder, Bloomberg News cited people familiar with the matter as saying.
The deal would see the Hong Kong tycoon Henry Cheng Kar-shun's family relinquish control of the company.
Under the proposed plan, Blackstone would gain the ability to restructure the debt-laden developer, while New World could continue selling assets to strengthen liquidity, the sources said.
The Cheng family currently holds about 45 percent of the company. It remains unclear how much of the company Blackstone would acquire or at what price, but the agreement could provide a crucial vote of confidence for the struggling firm, according to the report.
If the Cheng family hands control of New World to a US firm, it would mark a pivotal moment, highlighting the challenges the developer faces in securing funding to reduce debt and maintain operations, Bloomberg said.
One of Hong Kong's most heavily indebted property companies, New World was pushed close to default last year after an expansion fueled by borrowing was hit by the city's slowing property market.
Shares at New World closed up 7.3 percent yesterday, outperforming the city's benchmark Hang Seng Index, which rose 0.51 percent, on turnover of HK$334 million.
In recent years, New World has ramped up investment in projects such as the indoor entertainment hub SkyCity, Kai Tak Sports Park, leading to rising debt and the need to continuously sell assets to reduce leverage.
The group sold more than 2,200 units in Hong Kong last year, raising over HK$33 billion. In 2026, it plans to launch five new residential projects involving more than 3,600 units, including a development on Rose Street in Kowloon Tong.
Bloomberg previously reported that New World is racing to sell at least one asset by the end of June to meet its HK$27 billion sales target and achieve positive cash flow.
Potential asset sales could include the Rosewood hotel group, while the company has also explored selling mainland China real estate projects, including its landmark K11 developments in Hangzhou, Shenzhen, and Shanghai, sources said.
