Evergrande’s plan to sell a $2.6bn stake to a rival has fallen through, deepening fears of a collapse.
Shares in Evergrande’s Hong Kong-listed stock plunged by nearly 14% after being frozen during the deal period.
Hopson Development was set to buy a 51% stake in the heavily indebted developer’s property services unit. Both sides halted trading for more than two weeks on 4 October, but that resumed after the agreement collapsed.
The parties said in separate filings to the Hong Kong Stock Exchange that they had been unable to agree on terms of the deal.
Xu Jiayin, Evergrande’s chairman and founder, said that the company would “use its best effort to negotiate for the renewal or extension of its borrowings or other alternative arrangements with its creditors”, after the deal’s collapse.
He added: “There is no guarantee the group will be able to meet its financial obligations under the relevant financing documents and other contracts.”
Evergrande’s stock price has dropped by more than 80% this year, representing a loss of more than $190bn in market capitalisation.
