HONG KONG, Nov 2 (Reuters) - 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.

The property developer, which has one of the highest debt ratios among peers after a years-long expansion spree, would receive as much as $2.8 billion from the sale of NWS Holdings to its major shareholder, in a buyout deal to help it cut debt.

The city's top developers enjoyed decades of lucrative returns in one of the world's most expensive property markets, but falling prices as well as rising interest rates are putting pressure on the sector.

Chow Tai Fook Enterprises (CTFE), which holds about 45.2% of NWD shares, offered to buy roughly 97% of NWS stock for up to $4.5 billion, the parties said in June.

NWD will hold an extraordinary general meeting at 11:30 a.m. (0330 GMT) to vote on the deal. Approval is required from more than half the independent shareholders, which excludes CTFE and NWD.

To incentivise shareholders, NWD said it would pay a special dividend of HK$4 billion ($511 million), or HK$1.59 per share, upon completion of the deal.

"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.

Analysts said the $2.8 billion, which is equivalent to 15 years of dividend income from NWS, would give NWD an immediate liquidity boost as its bottomline suffers from expensive interest costs and weaker property revenues.

However, they cautioned about the impact on NWD's future profits. In the financial year of 2023, NWD posted a net profit of HK$900.9 million, 28% less than a year ago. Without NWS's contribution, it would have posted a net loss of HK$510.1 million.

"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% to preserve capital.

Company CEO Adrian Cheng told an earnings conference in late September the firm would use part of the proceeds from the NWS deal to repurchase bonds, including high-coupon perpetual bonds, and repay loans, a move analysts said could reduce interest expenses and book gains from buying back debts at discounts.

Shares of NWD edged up 0.3% ahead of the voting on Monday morning, while NWS eased 0.4%. The Hang Seng Property Index rose 1.6%. ($1 = 7.8227 Hong Kong dollars) (Reporting by Clare Jim; Editing by Lincoln Feast)