By P.R. Venkat

China Evergrande Group has appointed financial advisers to assess its capital structure and explore ways to ease the cash-strapped conglomerate's liquidity issues.

Houlihan Lokey (China) Ltd. and Admiralty Harbour Capital Ltd. have been appointed as joint financial advisers, China Evergrande said Tuesday.

The company said it expects contracted property sales to continue to decline in September, which is typically a month of higher property sales in China.

"However, the ongoing negative media reports concerning the group have dampened the confidence of potential property purchasers in the group," it said.

The continuous decline in contracted property sales will weigh on cash collections, which in turn puts tremendous pressure on the group's cash flow and liquidity, it said.

Global investors that hold Evergrande bonds have driven prices of its debt securities below $1.00, indicating that they think there is a high likelihood of default. The company is China's largest junk bond issuer, and borrowed aggressively both onshore and offshore to fund its rapid expansion in recent years.

Evergrande found itself in a tight spot after Chinese regulators told the country's real-estate developers in late 2020 to reduce leverage before taking on additional debt.

The company said that it has been actively exploring selling its interests in various units, including China Evergrande New Energy Vehicle Group Ltd., but has yet to make any significant progress.

The Shenzhen-based group had the equivalent of about $88 billion in borrowings at the end of June, 42% of which are due in less than a year. It disposed of $2.2 billion worth of assets in the first half of the year.

Write to P.R. Venkat at venkat.pr@wsj.com

(END) Dow Jones Newswires

09-13-21 2046ET