Credit Lyonnais lowers rating of New World Development to ˇ§lag marketˇ¨

Referring to New World Development (0017) selling of Regent Hotel to UK-based Bass Plc) at HK$2.7 mln, Credit Lyonnais estimated that New World Development could secured cash of HK$1.5 bln from the deal, because the company would spend HK$617 mln and HK$571 mln in purchasing hotel management contracts from two units.

Its overall net debt will be reduced from HK$26 bln to HK$24.5 bln, with debut ratio down from 44% to 42%.

Credit Lyonnais reduced the investment rating of the company from ˇ§leading the marketˇ¨ to ˇ§lag the marketˇ¨ and set its target price at HK$9.8, considering that the deal brought thin cash and its telecom assets canˇ¦t be sold in the short term.

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