Talks between Blackstone and New World Development over a potential $4bn recapitalisation have stalled as the Cheng family resists relinquishing control of the company, according to a report by Bloomberg.

Blackstone had proposed injecting about $2.5bn into a special-purpose vehicle that would become the developer’s largest shareholder, while the Cheng family would contribute between $1bn and $1.5bn. Discussions have reportedly slowed as the family explores alternative funding options that would allow it to retain greater influence over the business.

New World has been seeking fresh capital after a debt-driven expansion collided with the property downturn in Hong Kong and mainland China, pushing the developer close to default last year. The Cheng family effectively runs the firm, controlling roughly 45% of the company through its investment vehicle Chow Tai Fook Enterprises.

The negotiations also face complications linked to liabilities associated with the 11 Skies retail development near Hong Kong International Airport. Blackstone has reportedly pushed to resolve guaranteed rental payments tied to the project, which New World has so far been unable to renegotiate with the airport authority.

The company continues to face financial pressure despite securing an $11bn refinancing package with a group of banks last year. New World recently reported a HKD3.7bn loss, while net debt rose to about HKD122.7bn as of December, leaving the developer with a net debt-to-equity ratio of roughly 90.9%.

You can read more on this from Private Equity Wire, here.