May 3 (Bloomberg) -- New World Development Co., the Hong Kong builder controlled by billionaire Cheng Yu-tung, received permission from the city’s stock exchange to proceed with the listing of its local hotels. The shares rose.
The three hotels will be listed by means of “stapled” securities including shares and preferred shares in NW Hotel Investments Co. and units in NW Hotel Investments trust, according to a Hong Kong stock exchange filing yesterday.
New World may seek as much as $1 billion in a hospitality listing, two people with knowledge of the matter said in March. The company said it hadn’t determined how much it plans to raise through the sale.
After the listing, New World will hold at least 35 percent of the stapled securities, and together with its parent, Chow Tai Fook Enterprises Ltd., will own more than 50 percent. New World will consolidate the hotel company’s results into its own financial statements and said it doesn’t need shareholder approval to proceed.
New World Development’s shares rose 3.4 percent to HK$13.94 at 9:35 a.m. local time. The benchmark Hang Seng Index gained 0.3 percent.
The new company plans to pay out to shareholders all of its distributable income in the period from the listing through June 30, 2015, and 90 percent after that, according to the filing.
The spinoff will hold New World’s interests in the Grand Hyatt Hong Kong, Renaissance Harbour View Hotel Hong Kong and Hyatt Regency Hong Kong, according to the filing. New World said it will offer to sell its Hyatt Regency Sha Tin stake to the new company when it has necessary consents.
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