(Reuters) -Hong Kong property developer New World Development said on Thursday it had secured a term loan facility of up to HK$5.9 billion ($758.62 million) from German multinational investment lender Deutsche Bank AG.
The news comes after New World clarified earlier this month that it was in talks with the German bank over a loan facility.
The facility will have an initial committed tranche of up to HK$3.95 billion and would be used for the group’s ordinary course financing activities.
The loan will be backed by a first‑priority mortgage on the Victoria Dockside property and other assets related to it.
However, New World can continue to use Victoria Dockside as a collateral to secure additional financing for its business needs, the company said.
Despite clinching a crucial $11.24 billion loan refinancing package earlier this year, the company still needs additional funding to reduce its debt and sustain operations in a weak property market, it added.
Markets have been closely watching New World’s debt issues, wondering if they might signal a sector crisis similar to the one that hit mainland China in 2021.
New World’s debt woes trace back to an ambitious expansion spree, which collided with Hong Kong’s political unrest, the COVID-19 pandemic and a drawn-out real estate slump.
($1 = 7.7773 Hong Kong dollars)
(Reporting by Rishav Chatterjee in Bengaluru; Editing by Shreya Biswas)
