(Yicai) Aug. 13 -- Shares of Wongtee International Enterprise plunged after the troubled Chinese commercial property developer and operator said its major revenue-contributing asset was listed for a judicial auction for about 40 percent of its original price.

Wongtee [SHE: 000056] fell 1.5 percent to CNY2.72 (38 US cents) as of lunch break in Shenzhen today, after opening 10 percent down. The stock sank by the 10 percent exchange-imposed daily trading limit yesterday.

Wongtee Plaza and its associated facilities will be auctioned on Sept. 9 at a starting price of CNY3.1 billion (USD425.1 million), a discount of around 60 percent from its original asking price of CNY7.5 billion in 2022, the Shenzhen-based company announced late on Aug. 11.

Wongtee Plaza’s shareholder Shenzhen Rongfa Investment, a subsidiary of Wongtee, defaulted on a CNY3 billion (USD417.7 million) debt in March 2021. Wongtee, which had offered a guarantee on that loan, was then involved in the legal proceedings.

To resolve such debt issue, Wongtee put Wongtee Plaza up for sale for CNY7.5 billion on the Shenzhen United Property and Equity Exchange platform in March 2022. As no buyer showed any interest, the company lowered the price to CNY5.6 billion just a week later.

However, as both attempts to sell Wongtee Plaza failed, the commercial property was put up for a judicial auction at an ever-lower price.

The auction of Wongtee Plaza is expected to significantly impact Wongtee’s financial situation.

The property generated CNY369 million (USD51.4 million) in business revenue last year, contributing about 56 percent to the company’s total revenue, according to Wongtee’s 2024 earnings report. At the end of last year, Wongtee Plaza’s book value was about CNY5.8 billion, accounting for nearly 72 percent of Wongtee’s overall assets.

Located in Shenzhen’s central business district, Wongtee Plaza is the city’s first high-end and large-sized shopping center, with a total floor area of around 138,000 square meters. A local market insider told Yicai that this shopping mall has quite a good footfall due to its nice location.

Editor: Futura Costaglione