HONG KONG (REUTERS) – Shares of China Evergrande Group tumbled 12 per cent to an 11-year low on Monday (Dec 6) after the firm said there was no guarantee it would have enough funds to meet debt repayments, prompting the Chinese authorities to summon its chairman.

Evergrande’s stock on Monday fell more than 12 per cent to HK$1.98, its lowest since May 2010.

The shares fell as a 30-day grace period on a coupon payment of US$82.5 million (S$113 million) due on Nov 6 comes to an end on Monday.

Evergrande, once China’s top-selling developer, is grappling with more than US$300 billion in liabilities. A collapse could send shockwaves through the country’s property sector and beyond.

In a filing late on Friday, Evergrande, the world’s most indebted developer, also said it had received a demand from creditors to pay about US$260 million.

That prompted the government of Guangdong province, where the company is based, to summon Evergrande chairman Hui Ka Yan, and it later said in a statement it would send a working group to the developer at Evergrande’s request to oversee risk management, strengthen internal controls and maintain normal operations.

In a series of apparently coordinated statements late in the evening, China’s central bank, banking and insurance regulator and its securities regulator sought to reassure the market that any risks to the broader property sector could be contained.

Short-term risks caused by a single real estate firm will not undermine market fund-raising in the medium and long term, the People’s Bank of China said, adding that housing sales, land purchases and financing “have already returned to normal in China”.