Hong Kong (AFP) -
Trading in embattled property giant China Evergrande was suspended Monday on the Hong Kong stock exchange, as concerns about the debt-laden firm's future grow.
No reason was given for the suspension of the shares, which have plunged around 80 percent since the start of the year. Trading in its property management arm was also halted.
However, a report said Monday that Hopson Development Holdings planned to buy a 51 percent stake in Evergrande Property Services Group for more than HK$40 billion ($5.1 billion).
And Bloomberg Intelligence analyst Patrick Wong said the halt may be related to a major asset disposal or capital restructuring.
'Trading in the shares of China Evergrande Group will be halted,' said a statement to the exchange. 'Accordingly, all structured products relating to the Company will also be halted from trading at the same time.'
Shares in its electric vehicle company, which last week scrapped a proposed Shanghai listing, were not suspended, though they fell six percent in early trade. Hong Kong's Hang Seng Index lost more than two percent in early trade.
Officials at the firm have been struggling to deal with a crisis that has left it more than $300 billion in debt, fuelling fears of a contagion for the wider Chinese economy that some warn could spread globally.
Last week it said it would sell a $1.5 billion stake in a regional Chinese bank to raise much-needed capital, as it struggles to make interest payments to bondholders.
Beijing has stayed silent on the travails of the property empire, but state media has trailed various responses in a nod to the mood towards a private company that grew on a debt binge in the boom years of Chinese real estate.
And on Wednesday the People's Bank of China said the country's financial sector must meet the goals of 'stabilising land and housing prices' and 'insist on not using real estate as a short-term economic stimulus'.
It also stressed that 'houses are used for living, not speculation'.
Company officials have hired experts including financial services firm Houlihan Lokey -- which advised on the restructuring of Lehman Brothers when it went under during the global financial crisis -- as they try to avoid a collapse.
State regulators have also sent a team of financial advisers to assess the company, according to reports.
The firm last month agreed a deal to pay interest on a domestic bond but there has been no news about repayments on two offshore notes, though it has a 30-day grace period before it is considered to be in default.
'The first obligation is going to make sure that homeowners who bought those homes take delivery and are made whole,' Marathon Asset Management CEO Bruce Richards said. 'At the very end of the pecking order are offshore bondholders.'
The liquidity crunch has triggered public anger and rare protests outside Evergrande's offices in China as investors and suppliers demand their money back.
The group has admitted to facing 'unprecedented challenges' and warned that it may not be able to meet its liabilities.
The country's real estate sector has been under tightened scrutiny in recent months, with regulators announcing caps for three different debt ratios in a scheme dubbed 'three red lines' last year.
-- Bloomberg News contributed to this story --