Shares in real estate developer China Evergrande slumped in Hong Kong after the company said a potential sale of its property services unit had collapsed.
A deal to sell 50.1% cent of Evergrande Property Services Group to rival developer Hopson Development Holdings for HK$20bn ($2.6bn) had been terminated last week, the group said late on Wednesday.
Evergrande, labouring under more than $300bn in debt, has caused global market jitters over the health of China’s real estate sector as it continues to miss bond repayment deadlines.
The company has been trying to offload assets since September to generate funds to repay creditors, including 1.6 million homebuyers who have bought unfinished properties, building contractors and suppliers, followed by Chinese banks and bondholders.
The company will officially go into default if it fails to stump up $83.5m when a 30-day grace period for a repayment originally missed in September ends on Monday.
Evergrande said in an exchange filing on Wednesday that the grace periods for the payment of the interest on its US dollar-denominated bonds that had become due in September and October had not expired.
Trading in the Hong Kong-listed shares of China Evergrande, its property services unit and Hopson all resumed on Thursday after a more than two-week suspension.
Evergrande lost 12% and its property services unit dropped 6.5%, while its electric vehicle arm plunged as much as 10.6%. Hopson rose 5%.
