Evergrande shares plummet as default risk mounts

Shares in ailing Chinese developer Evergrande plummeted on Monday (September 20).

The stock closed down by around 10%, hitting 11-year lows.

Investors are getting increasingly jittery amid mounting fears of a messy collapse.

Evergrande is weighed down by $305 billion in liabilities.

Executives have been scrambling to pay its many lenders, suppliers and investors, some of whom have descended on company headquarters to demand their money back.

Reuters sources say one of its main lenders has made provisions for losses on loans to the firm.

Some creditors are said to be giving it more time to pay.

On Sunday (September 19) the firm said it was repaying investors in its wealth management products with real estate.

Meanwhile, regulators have warned that a default could spark broader risks for the country's financial system if nothing is done.

Policymakers have told lenders to extend interest payments, or roll over loans.

However, market watchers are largely of the view that a direct state bailout is unlikely.

Evergrande's woes have pressured the broader sector.

Rival property developer Sunac dropped over 10% on Monday, while state-backed Greentown China was down around 7%.

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