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Stock Markets14 minutes ago (Sep 26, 2021 10:15PM ET)

(C) Reuters. The company logo is seen on the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China September 26, 2021. REUTERS/Aly Song

HONG KONG (Reuters) -Shares of China Evergrande’s electric car unit plunged as much as 26% on Monday after it warned it faced an uncertain future unless it got a swift injection of cash and after it said it will not proceed with plans to issue RMB shares.

The warning by China Evergrande New Energy Vehicle Group after the market closed on Friday was the clearest sign yet that the embattled property developer’s liquidity crisis is worsening in other parts of its business.

Shares of the electric car unit slid to as low as HK$1.66 in early trade before paring losses to fall 2.2%. China Evergrande’s stock rose 5% to steady near the decade-low they made last week, while Evergrande dollar bonds were at distressed levels.

In the broader market, concerns that a collapse at Evergrande could drive a global crisis have ebbed.

“I think the markets have priced in that on the balance of probabilities, the shock and awe is over,” said Kyle Rodda, analyst at brokerage IG Markets in Melbourne.

“Markets are really just expecting from here on in, a company that is doomed to failure but one which won’t be allowed to result in major risks within the Chinese financial system – or that (contagion) won’t pervade global markets.”

Evergrande missed a payment deadline on a dollar bond last week and its silence on the matter has left global investors wondering if they will have to swallow large losses when a 30-day grace period ends.

Its next major test in public debt markets will come on Sept. 29, when it is due to make a $47.5 million bond interest payment on its 9.5% March 2024 dollar bond.

With liabilities of around $305 billion, Evergrande has run short of cash and rapidly become Beijing’s biggest corporate headache, with investors worried a collapse could pose systemic risks to China’s financial system.

The stricken developer is scrambling to raise funds to pay its many lenders and suppliers, as it teeters between a messy meltdown with far-reaching impacts, a managed collapse or the less likely prospect of a bailout by Beijing.

China Evergrande’s electric car unit’s shares tumble 26% after warning

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China Evergrande’s electric car unit’s shares tumble 26% after warning