Real estate investment firm Chinese Estates, a major shareholder in the Evergrande Group, has announced plans to liquidate its stake in the company due to its current weak financial position.

In a statement sent to the Hong Kong Stock Exchange, Chinese Estates said the board of directors was “concerned” by the latest statements made by Evergrande regarding its liquidity and the “potential consequences” if the measures announced to address the situation “cannot be effectively implemented”.

Chinese Estates is one of the leading investment firms in the Evergrande. And his participation rate at the end of last month was 5.66%. Since then, it has sold nearly 109 million shares, representing about 0.82% of its stake in Evergrande, for a total of HK$246.5 million (€27.1 million).

After consulting with the shareholders, the company now has a maximum of 12 months to dispose of the rest of its stake.

Evergrande’s stock is down about 80% since the start of the year. In the Hong Kong session on Thursday, bonds rose 32% in what was the biggest daily rise since it went public in November 2009, as investors focus on repaying a debt rather than the shareholder position.

If it manages to sell its entire stake in Evergrande, Chinese Estates estimates a loss of HK$9,486 million (€1,041 million) for the current year. Evergrande is the world’s most indebted real estate company, has serious liquidity problems and is at risk of default.

This Thursday is an important day for the group, when a payment deadline of about 84 million dollars will be added, corresponding to the interest of some bonds issued in dollars, on the 29th of the month, another 47.5 million dollars.