(Yicai Global) Sept. 17 -- Shares of WorldUnion Properties Consultancy dropped after the real estate intermediary agreed that debt-ridden China Evergrande Group could repay CNY246 million (USD38 million) of accounts receivable in the form of property.

WorldUnion [SHE:002285] closed down 6.7 percent today at CNY4.17 (65 US cents), after earlier slumping as much as 9.6 percent. The Shenzhen-based firm’s stock has fallen 43 percent this month.

Evergrande and its units owe WorldUnion about CNY1.2 billion (USD186 million) as of Aug. 31 for providing agency services for new home sales, the property broker said in a statement late yesterday. It is in contact with Evergrande to resolve the issue.

WorldUnion stumped up CNY1 billion in a private placement of shares by Evergrande in May 2017 to maintain their strategic partnership, and it has received nearly CNY35.4 million in dividends from the investment.

S&P Global Ratings further downgraded Evergrande to CC from CCC, with a negative outlook, on Sept. 15, as the developer’s liquidity seems to be exhausted and its default risk has increased.

Shenzhen-based Evergrande needs to repay in cash those creditors who are unwilling to accept property or commercial paper, so the pressure to settle is still relatively high, S&P said. Evergrande has used property to offset arrears amounting to CNY25.2 billion (USD3.9 billion), which are part of the company’s contracted sales in July and August.

Evergrande’s debt servicing costs are more than CNY60 billion a year, S&P estimated. Its unrestricted cash balance also fell 45 percent to CNY86.8 billion as of the end of June.

Shares of Evergrande [HKG:3333] fell 3.4 percent today to HKD2.54 (33 US cents). The stock is down 83 percent since the start of the year. 

Editor: Futura Costaglione