Evergrande Group. Photo: VCG

Evergrande's plan to sell a 51 percent stake in its property management unit to rival Hopson Development has been halted, media reports said on Tuesday, indicating the depth of the debt crisis confronting the cash-strapped Chinese property giant.

The sale of a majority stake in Evergrande Property Services has been suspended, Nikkei Asia reported on Tuesday, citing New York-based financial intelligence provider REDD.

Earlier this month, it transpired that the deal could be valued at more than HK$40 billion ($5.14 billion). 

Evergrande's attempt to sell its Hong Kong offices has also reportedly fallen through.

Moreover, National Electric Vehicle Sweden AB (NEVS), Evergrande's Swedish EV unit, is in talks to find new owners as Evergrande battles default on more than $300 billion in debts, Reuters reported on Friday, citing NEVS CEO Stefan Tilk. The EV unit is reportedly valued at up to $1 billion.   

The risk from the property giant is believed to be well under control, however.

At a Sunday virtual meeting of the Group of 30, Yi Gang, governor of the People's Bank of China, the country's central bank, said that China can contain the Evergrande risk at large.

Evergrande's shares in Hong Kong have been suspended since the start of the month, but they were down almost 80 percent year-to-date prior to the suspension.

As of the end of June, Evergrande's total liabilities had swelled to 1.97 trillion yuan ($305 billion) on the back of 2.38 trillion yuan in total assets, per its interim financial disclosure released at the end of August. Mirroring its indebtedness, the company's interest-bearing debts hit 571.7 billion yuan as of the end of June, among which debts due within a year stood at 240 billion yuan.

Evergrande's failure to pay overdue bills and its default on some wealth management products seemingly fanned concern over its debt woes.

Global Times