Evergrande share price dives as new debt payment deadline approaches

Evergrande, the Chinese property development behemoth, again faces the possibility of defaulting on its debt as it approaches a deadline for a $82.5m repayment.

Upon markets closing on Monday, shares in the group are down by nearly 20%.

It is the first time shares have traded since Evergrande made an announcement last friday that they may not be able to meet a $260m obligation, while also confirming that its chair had been summoned by regulators.

Additionally, Evergrande has constructed a new risk management committee, made up of members from state-controlled firms.

In a statement issued on Monday evening, Evergrande said that its new risk management committee would “play an important role in mitigating and eliminating the future risks of the group”.

Evergrande added that “the resources [that committee members] would be able to utilise will be beneficial for the group to overcome the challenges it currently faces”.

Regulators in China are doing the best to calm fears over the potential of a fallout from both domestic and overseas investors.

The central bank confirmed plans to free up $188bn worth of liquidity for China’s banking system.

It will do this by cutting the share of deposits financial institutions must hold in reserve by 50 basis points, which should allow for more money to be directed towards stimulating the economy.