Shares in China Evergrande Group, the world’s most indebted developer, fell to an 11-year low on Monday after the company said it would “actively engage” to formulate a restructuring plan and the group’s chair was summoned by regulators.
Shares in the company fell as much as 12 per cent from their close on Friday to hit HK$1.98 a share, their lowest price since May 2010.
Evergrande on Friday revealed it had received a demand relating to a $260m liability, but gave no further details.
The company also said there was “no guarantee” that it had enough money “to continue to perform its financial obligations” and pledged to “actively engage” with offshore creditors to form a restructuring plan.
Shortly after the filing, the People’s Bank of China stepped up its criticism of the company, accusing it of “poor management” and pursuing “blind expansion”.
Hours later, officials in Guangdong province summoned the group’s chair, Hui Ka Yan, once one of China’s richest men, to a meeting and agreed to parachute a team of officials into the indebted company.
The updates thrust Evergrande back into the spotlight after a relatively quiet period for the developer, which faces more than $300bn in liabilities.
The company sent shockwaves through China’s once-booming property sector when it warned it may default on offshore bond payments in August. The ensuing crisis has swept up rival developers.