Shares of Evergrande Group plummeted 10% in Hong Kong on Monday, hitting just 2.28 Hong Kong dollars ($0.29) per share. The stock has shed 84% so far this year, plunging below its 2009 IPO price of 3.5 Hong Kong dollars ($0.45).
Evergrande did not immediately respond to a request from CNN Business for comment about those payments.
And interest payments totaling more than $100 million are due later this week on two of the company’s bonds, according to data provider Refinitiv.
But it’s not clear how much — if any — of those debt obligations Evergrande will be able to meet. The group is China’s most indebted developer, with more than $300 billion worth of liabilities. Over the last few weeks, it’s warned investors of cash flow issues, saying that it could default if it’s unable to raise money quickly.
Evergrande’s debt burden is so large that analysts have warned that risks could spread throughout China. The company holds about 6.5% of the total debt held by China’s property sector, according to an estimate by UBS.
Mainland Chinese stock and bond markets were shut Monday for a public holiday and will reopen on Wednesday.
Goldman Sachs analysts warned of “rising risks” from the Chinese property market.
“Concerns over Evergrande are rising and signs of financing difficulties spreading to other developers are emerging,” they said in a research report published Sunday night. The Chinese government needs to “carefully manage” Evergrande’s potential default or restructuring, while delivering a clear message to help “shore up confidence and to stop the spillover effect,” they said.
Trouble at the heavily indebted property giant has been brewing for the past year. In August 2020, Beijing began containing the property sector’s excessive borrowing in an attempt to prevent the housing market from overheating and to curb debt growth.
Evergrade’s liquidity crisis has intensified in recent weeks, triggering a further plunge in the company’s stocks and bonds.
They also questioned a senior Evergrande executive, who they claimed had redeemed his investment several months ago, suggesting that he had known the extent of the company’s problems before telling investors.
The company on Friday warned that six of its executives could face “severe punishments” for cashing out early on the wealth management product. On Saturday, the company said it would start repaying its wealth management investors with real estate.