(Yicai Global) Dec. 14 -- Shares of Shimao Group Holdings plunged after a deal by two of the Chinese property developer’s subsidiaries added to concerns that it is facing a cash crunch.

Shimao [HKG: 0813] closed almost 20 percent lower today at HKD5.67 (73 US cents), bringing its decline over the past two trading days to 30 percent. Several of its the Hong Kong-based firm’s bonds have also fallen sharply.

Shanghai Shimao will sell all of its property management assets to Shimao Services Holdings for almost CNY1.7 billion (USD267 million), it said late yesterday.

The deal aims to consolidate the property management business at Shimao Services and develop a more specialized operation, while Shanghai Shimao can supplement cash flow to focus on its main business and invest resources in the development and operation of commercial properties, Shanghai Shimao said.

Shares of Shanghai Shimao [SHA: 600823] fell 2.7 percent today to CNY3.21 (50 US cents), while Shimao Services [HKG: 0873] plummeted 32 percent to HKD4.84.

China’s real estate industry has faced tightened policies in the second half of the year and some property companies have defaulted on their debts. Shimao has dismissed concerns about its liquidity as mere rumors, but it has repeatedly resorted to financing measures such as issuing new shares and offering up its headquarters building as collateral to repay its debts.

Editor: Tom Litting