HONG KONG : China Evergrande Group's shares and bonds extended declines on Wednesday, a day after the debt-laden developer warned of default risks and legal action from creditors as it scrambles to repair its balance sheet.
Reporting first-half earnings on Tuesday, Evergrande said it would implement measures to improve cashflow, including adjusting project development timetables, renewing borrowings and disposing of equity interests and assets. But it cautioned that if it was not successful, it could default on borrowings and could see more litigation.
Citi analyst Griffin Chan said in a report he expects a loss in Evergrande's core property business for the full-year, and cut its earnings per share estimate for the next two years by 59per cent and 60per cent due to lower margin assumptions.Shares of the country's No. 2 developer fell as much as 2.5per cent in Tuesday morning trade to HKUS$4.25. The stock has lost more than 70per cent of its value this year.