HONG KONG : Shareholders of Hong Kong's New World Development (NWD) will decide on Thursday whether to keep the company's "cash-cow" construction subsidiary for long-term profits, or pocket an immediate special dividend by selling it.
HONG KONG : Shareholders of Hong Kong's New World Development will decide on Thursday whether to keep the company's"cash-cow" construction subsidiary for long-term profits, or pocket an immediate special dividend by selling it.
Chow Tai Fook Enterprises , which holds about 45.2 per cent of NWD shares, offered to buy roughly 97 per cent of NWS stock for up to $4.5 billion, the parties said in June. "The deal is good for NWD's shareholders because, first, the company's debt ratio will drop, and second, they will get a high special dividend," said Alvin Cheung, associate director of Prudential Brokerage Ltd in Hong Kong, who does not hold NWD shares.
"NWD's balance sheet will be strengthened... yet it is inevitable we see some negative impact on future earnings and dividends," said CLSA analyst Alvin Wong in a report, who slashed NWD's target price to HK$10.96 from HK$29.90 after the firm cut its dividend by 63 per cent to preserve capital.
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