China Evergrande Group scrapped the sale of its property management unit to a rival, as its asset disposal plan was rebuffed for the second time in a week just before a 30-day grace period runs out for declaring the world’s most indebted developer in default. An October 1 bid to buy 50.1 per cent of Evergrande Property Services for HK$20.04 billion (US$2.58 billion) failed to materialise because Evergrande rescinded the sale on October 12, according to a late-night filing by the purchaser Hopson Development Holdings Limited to the Hong Kong stock exchange. Hopson said it “does not accept that there is any substance whatsoever to [Evergrande’s] purported rescission or termination of the agreement and has refuted [its] notice,” according to the statement, adding that while Hopson “is prepared to complete the purchase of [the Evergrande unit], there is no certainty that the sale as agreed will be completed.” Evergrande Property Services, whose shares had been halted from trading on the Hong Kong exchange since October 1, said in two separate filings that the transaction “did not take place” after it terminated the deal because Hopson “had not met the prerequisite” for the purchase, without providing details. Evergrande’s spokespeople could not be reached to comment. The deal may have blown up because of a disagreement over the payment of the purchase price, Hopson said. Evergrande wanted immediate payment, while Hopson wanted to pay only after completing a due diligence to assess the payable accounts and receivables with suppliers, according to the statement. Evergrande did not comment. The rescission is the second rebuff of Evergrande’s asset sale since Yuexiu Property, a state-owned developer controlled by the Guangdong provincial authorities, dropped its US$1.7 billion bid on October 15 to buy the 26-storey Evergrande Centre office tower on the Wan Chai waterfront because of concerns over its unresolved debt, according to a Reuters report, citing two unidentified people familiar with the matter. The setback comes at a particularly bad time for Evergrande, barely two weeks after its billionaire founder Hui Ka-yan turned 63 . The Shenzhen-based developer, facing US$300 billion in liabilities, is coming up against a 30-day grace period to pay US$83.5 million in coupon payments for an offshore bond, which was missed on September 23. Evergrande has been trying to sell a variety of assets to help ease its cash crunch and repay suppliers, who are critical to the company’s survival. It has a backlog of 1.3 trillion yuan (US$203 million) of unfinished properties and has run into difficulty selling uncompleted flats and homes as questions have risen about its financial future. A potential default by Evergrande has been dubbed by some commentators as China’s “Lehman moment ,” a characterisation that has been disputed by China’s financial regulators . Still, it would send tremors through a capital market that is already nervous about the financial standing of China’s heavily indebted developers. As many as 206 plots of land, or a third of all land sold for development across China , were withdrawn from auctions since September, as tough financing rules known as the central bank’s “three red lines” deprived many builders of capital and diminished the appetite for risk. In a sign of worse times ahead, the average price of new homes fell in September across 70 Chinese cities, the first monthly drop in more than six years, confirming the market slump that had dragged down China’s third-quarter economic growth pace. Evergrande Property Services, spun off from the parent last December, rose 18 per cent over four consecutive days in late September to HK$5.12 (US$0.66) before trading was halted for the announcement of its controlling stake to Hopson. Evergrande itself has plunged to HK$2.95 per share from a January 19 high of HK$17.26, losing US$24.4 billion in market value. Hopson’s shares rose 4.5 per cent over three days in a row to HK$25.18 before trading was suspended for its Evergrande deal.