China Evergrande shares plunge as much as 14% in resumed trade after $2.6 billion deal collapses

• Shares of China Evergrande have plunged as much as 14% after its deal to sell a $2.6 billion stake in a key unit fell through.
• Evergrande shares were suspended for more than two weeks before trade resumed on Thursday.
• Once China’s top-selling developer, Evergrande is now reeling under more than $300 billion of debt.

Shares of China Evergrande Group slid as much as 14% on Thursday after a deal to sell a $2.6 billion stake in its property services unit fell through, in the latest blow to the developer whose massive debt woes have rattled global markets.

Evergrande said on Wednesday it had scrapped a deal to sell a 50.1% stake in Evergrande Property Services Group Ltd to Hopson Development Holdings Ltd as the smaller rival had not met the “prerequisite to make a general offer.”

Both sides appeared to trade blame for the setback, with Hopson saying it does not accept “there is any substance whatsoever” to Evergrande’s termination of the sales agreement, and it is exploring options to protect its legitimate interests.

The deal is the developer’s second to collapse in a matter of days after two sources told Reuters the $1.7 billion sale of its Hong Kong headquarters had failed amid buyer worries over Evergrande’s dire financial situation.

The latest setback also comes just ahead of the expiry of a 30-day grace period for Evergrande to pay $83.5 million in coupon payments for an offshore bond, at which time China’s most indebted developer would be considered in default.

Trading in shares of China Evergrande, its property services unit and Hopson all resumed on Thursday after a more than two-week suspension. China Evergrande trimmed opening losses and was down 6% in early trade, while its property services unit dropped 5.7%. Shares of Hopson fell 0.3%.

Once China’s top-selling developer and now reeling under more than $300 billion of debt, government officials have come out in force to say Evergrande’s problems will not spin out of control and trigger a broader financial crisis.

Separately on Thursday, Modern Land (China) Co Ltd said it has ceased to seek consent from investors to extend the maturity date of a dollar bond due on Oct. 25. Its shares were suspended from trading on Thursday.