A sharp drop in Evergrande shares in Hong Kong.
Evangrande, which is heavily indebted, had stopped trading its shares in anticipation of an announcement.
Persistent rumours indicated that real estate company Hopson Development was ready to buy a 51 percent stake in its property services unit.
On Wednesday, Evergrande said the $2.6 billion (£1.88 billion) deal had fallen through because the parties had failed to agree on the terms of the deal.
The boat is sinking for Evergrande and the financial world is holding its breath as everyone is afraid of the negative reaction of the world markets.
Financiers are very worried about the debt of more than 300 billion dollars. The total liabilities of the company are equivalent to about 2% of China’s gross domestic product, which is considerable.
Hopson Development is another Chinese real estate company that Evergrande owes money to, and some analysts thought the potential deal was a way for Evergrande to clear its debt.
Evergrande said it was not interested in the Hopson Group’s offer and that the deal was terminated on October 13 and that it was now exploring other available options to protect its interests.
Evergrande could not meet the debt repayment and the events rushed in the wrong direction
The stock fell and its rating was lowered by the world’s rating agencies.
Evergrande’s chairman and founder, Hui Ka Yan, says his plan is to try to get extensions on its debts and “other alternative arrangements” with its creditors.
But, he added, “there is no guarantee that the group will be able to meet its financial obligations.
For the past month, the bad news has been piling up and Evergrande has twice failed to meet its interest payments.
Today, Evergrande obtained a three-month extension on another of its debts after agreeing to provide additional guarantees, according to the research firm REDD.