© Reuters. FILE PHOTO: A logo of China Evergrande Group is displayed at a news conference on the property developer’s annual results in Hong Kong, China March 28, 2017. REUTERS/Bobby Yip/File Photo
HONG KONG (Reuters) – Advertising firm Leo Group said it is applying to a Chinese court to freeze 356 million yuan ($55.06 million) in assets of Evergrande Group for overdue payments, the latest supplier to sue the indebted property developer.
Leo’s lawsuit disclosed in a securities filing late on Monday comes after Huaibei Mining Holdings said last week its construction unit is suing Evergrande over an overdue 400 million yuan in fees.
And Langfang Development said last week a court has ordered Evergrande’s shares in the company be frozen for three years following a ruling on a lawsuit between Evergrande and an investment company.
Worries over the financial health of China’s No.2 developer intensified after it said in June it did not pay some commercial paper on time, and on news last month that a court froze a $20 million bank deposit held by the developer on the request of Guangfa Bank.
Separately, Lets Holding, a construction R&D company, said in a securities filing at the weekend it does not rule out taking legal means to resolve Evergrande’s overdue commercial paper of 33 million yuan.
Evergrande did not immediately respond to a request for comment on the filings by Leo Group and Lets Holding.
Rating agency Moody’s (NYSE:) downgraded Evergrande’s corporate family rating (CFR) by two notches on Monday to Caa1 from B2, and the senior unsecured ratings to Caa2 from B3, following similar action from S&P and Fitch earlier.
The downgrades reflect the firm’s heightened refinancing risk over the coming 12-18 months given its weakened funding access and liquidity position, Moody’s said.
Shares of Evergrande dropped as much as 4.9% on Tuesday morning in Hong Kong, versus a 1.1% decline in the broader market.
($1 = 6.4655 renminbi)
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