Shares in Evergrande’s electric vehicle unit tumbled on Sept. 27 in Hong Kong after suspending plans for a secondary listing on Shanghai’s Star Market due to a “serious shortage of funds.”
The pulled listing is the latest blow to the unit that once had a higher stock market valuation than Ford. It comes as Evergrande’s liquidity crisis has roiled global markets and deepened fears among investors that they will not be repaid if the company defaults.
Evergrande New Energy Vehicle shares plunged initially by around 25 percent before paring losses to around 10 percent.
The heavily indebted developer missed an $83.5 million coupon payment due on Sept. 24 on one of its dollar-denominated bonds and has a 30-day grace period before officially defaulting.
Its next major test in the public debt markets will be on Sept. 29, when it is scheduled to make a $47.5 million interest payment on a dollar bond maturing in March 2024.
At least two Chinese local governments have taken control of sales revenue from Evergrande properties to prevent a potential misuse of funds.