China Evergrande Group (SEHK:3333) has dropped plans to sell a 50.1% stake in its property services unit, which would have raised $2.6 billion, dealing another blow to the cash-strapped developer's efforts to raise cash to pay its creditors. Evergrande was in talks to sell the stake in Evergrande Property Services Group Limited (SEHK:6666) to smaller rival Hopson Development Holdings Limited (SEHK:754). In a stock exchange filing late on October 20, 2021, Evergrande said that the company had reason to believe that Hopson had not met the "prerequisite to make a general offer" for shares of its property services unit.

It did not elaborate. Evergrande's disclosures came as more Chinese officials sought to reassure investors and homeowners on October 20, 2021 over a debt crisis afflicting the country's property sector, which has roiled global markets in recent weeks. In its October 20, 2021 filing, Evergrande said it would continue to implement the measures "to ease the liquidity issues" and would use best effort to negotiate for the renewal or extension of its borrowings with its creditors.

"In view of the difficulties, challenges and uncertainties in improving its liquidity, there is no guarantee that the group will be able to meet its financial obligations under the relevant financing documents and other contracts," it said. Sources told Reuters on October 19, 2021 Evergrande had been forced to stall its stake sale in property services unit to Hopson after failing to win the blessing of the Guangdong provincial government, which is overseeing Evergrande's restructuring. Some of Evergrande's international creditors had also opposed the deal, one of them said.

In a separate exchange filing announcing the deal collapse on October 20, 2021, Hopson said it was prepared to complete the deal but it received a transaction termination notice from Evergrande on October 13, 2021.