Henry Cheng 'still hunting for successor'

Staff reporter and Bloomberg

New World Development (0017) will distribute a special dividend of HK$1.59 after completing the sale of NWS Holdings (0659), while its chairman Henry Cheng Kar-shun said he was still looking for a successor.

The developer has received around HK$21.7 billion from the sale of a 60.85 percent stake in NWS to its controlling shareholder Chow Tai Fook Enterprises, according to a filing yesterday.

The last day for trading shares with entitlements to the dividend is tomorrow and the cash handout will be made on December 20.

Earlier this month as many as 99.35 percent of NWD's independent shareholders voted in favor of the buyout offer at the extraordinary general meeting. The move in effect shifted cash from Cheng's family's investment flagship to NWD, one of the most indebted Hong Kong developers among its larger peers.

This came as Cheng said his family business is still looking for a successor, calling into question the long-held notion that his eldest son will take over his property and retail empire.

His eldest son, Adrian Cheng Chi-kong, is NWD's chief executive. Adrian Cheng's siblings include Sonia Cheng Chi-man, who looks after the Rosewood Hotel Group. The Cheng family also owns a stake in Chow Tai Fook Jewellery (1929).

Since the family has businesses in different sectors it isn't necessary to find a single leader and instead, members can take respective roles, Henry Cheng said.

If there isn't a suitable candidate he may also consider hiring outside of the family.

"Investors may remain unimpressed with NWD's high gearing ratio and subdued profitability compared to Hong Kong developer peers," said Jeff Zhang, an analyst at Morningstar. Regardless of any potential change in executives, "management should further pay down NWD's debt and perpetual bonds to ease liquidity pressure."