The debt crisis engulfing China’s property market intensified as another developer defaulted on its bonds and a rival saw its credit score slashed.

As the suspension of shares in the world’s most indebted property group extended into a second day, smaller rival Fantasia Holdings failed to make a £151million repayment.

In a further blow, ratings agency Fitch cut the credit score of developer Sinic to ‘C’ – deep in junk territory and a sign that it believes default is imminent.

China crisis: As the suspension of shares in property group Evergrande extended into a second day, smaller rival Fantasia Holdings failed to make a £151m repayment

China crisis: As the suspension of shares in property group Evergrande extended into a second day, smaller rival Fantasia Holdings failed to make a £151m repayment

China crisis: As the suspension of shares in property group Evergrande extended into a second day, smaller rival Fantasia Holdings failed to make a £151m repayment

The moves underlined the crisis in the Chinese property market that has centred on Evergrande, and could spill out into the global economy. 

Evergrande is grappling with more than £220billion of debt and last month missed two repayments on its bonds.

The firm is run by Hui Ka Yan, at one point China’s richest man, and claims to have built homes for more than 12m people since it was founded in 1996. Shares are down 80 per cent this year.

The stock was suspended on the Hong Kong stock exchange on Monday pending a ‘major transaction’ expected to involve the £3.7billion sale of a 51 per cent stake in its property management division.

Shares in rival, and likely buyer, Hopson Development were also suspended while Fantasia shares were suspended yesterday following its default.

Chinese property firms are under pressure from Beijing to reduce their borrowing levels after decades of debt-driven expansion that helped fuel growth in the world’s second-largest economy.

Analysts warned that shareholders could be waiting for some time before trading resumes – and could face huge losses. 

‘There’s nothing investors can do – the worst is yet to come,’ said Dickie Wong, head of research at Hong Kong-based Kingston Securities.

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