Blackstone has walked away from a proposed US$4 billion (HK$31.2 billion) tie-up with Hong Kong’s New World Development (0017) after the indebted property developer refused to cede control, Bloomberg News reported on Wednesday, citing people familiar with the matter.

Blackstone declined to comment. New World did not immediately respond to a Reuters request for comment.

New World, the most heavily indebted developer among its peers, has been seeking to refinance debt and bolster liquidity as Hong Kong’s property sector remains under pressure from tight credit conditions and a weak office market.

The Cheng family has been in talks with a handful of financial institutions to sell an equity stake in New World, and Blackstone was the most advanced party in the process, Reuters reported in March.

Any investor would have to align their interests with the family and a change of control would be unlikely, they said at the time.

The Cheng family, one of Hong Kong’s wealthiest dynasties, controls 45.24 percent of New World through its private conglomerate, Chow Tai Fook Enterprises, according to LSEG data.

New World has been in negotiations with investors to sell assets, including the K11 Art Mall in Kowloon, but has yet to secure a buyer.

Shares of the company, which has a market value of about US$3 billion, are up about 29 percent so far this year. They closed down 1.37 percent on Wednesday.

Reuters