Goings on at China Evergrande Group continue to shake global markets on Monday as the Chinese property giant's shares were suspended in Hong Kong.
The hugely indebted developer's property management division said the trading halt was pending a possible takeover offer or merger and a “general offer for the shares of the company”.
Both parent company and property management arm were suspended in anticipation of “a major transaction”, Evergrande said.
While no details were given, there was speculation that rival developer Hopson was preparing to buy a major stake in Evergrande Property Services.
Parent Evergrande last week failed to make two offshore bond payments on their due date, according to holders of the bonds, which forms part of a total of US$162.38m coupon payments due by the end of October.
The group, which has upwards of US$300bn in total liabilities, including around US$20bn in offshore debt, last week sold a stake in a bank for 10bn yuan (US$1.5bn).
"One would have thought Hopson sees this as an opportunity to strike a bargain deal, given how Evergrande is in a desperate situation," said analysts at AJ Bell.
Market analyst Naeem Aslam at AvaTrade said: "It seems like the Chinese government is in no mood to bail out Evergrande Group as it comes near to a substantial restructuring. However, Beijing is extending a helping hand to the company's key stakeholders, including homeowners, developers, and the overall real estate sector. These precautions are being taken to avoid a general market spillover.
"Last week, Chinese officials took steps to encourage financial institutions to provide credit to property buyers and to support the overall real estate sector. Similarly, the Chinese government bought Evergrande's stake in a struggling bank and pumped $71 billion (460 billion yuan) into the economy to boost liquidity. These actions demonstrate that the Chinese government intends to do everything possible to prevent a spread of the crisis to other markets but will most likely not extend a lifeline to Evergrande itself. Bondholders, both domestic and foreign, stand to lose the most in such a scenario."