(Yicai) Sept. 25 -- Shares of China Evergrande Group plunged after the debt-ridden Chinese property developer said it is unable to issue new debt.

Evergrande [HKG: 3333] was trading down 20 percent at 44 Hong Kong cents (6 US cents) as of 10.50 a.m. in Hong Kong today.

Evergrande is unable to meet the qualifications for the issuance of new notes at the moment, as its key unit Hengda Real Estate Group is being investigated by China's securities regulator, the Shenzhen-based firm said in a statement yesterday.

"Holders of the company's securities and potential investors should exercise caution when buying or selling the company's shares," Evergrande noted.

The announcement came just a few days after Evergrande said it had postponed its debt restructuring meetings for the third time.

Evergrande initiated a debt restructuring plan in March, when it proposed to repay USD19.1 billion of offshore debt through the issuance of new notes and debt-to-equity swaps.

The meetings with creditors to discuss the debt restructuring were originally scheduled on Aug. 23, but were later postponed to Aug. 28 after Evergrande's new energy vehicle arm introduced new investors. Afterward, the meetings were moved to today and tomorrow.

Evergrande said on Sept. 22 that it would postpone its meetings again because the sales condition did not meet expectations, so the company would have to reassess the terms of the proposed restructuring plan to meet creditors' demand.

The delay of the restructuring meeting means Evergrande is reassessing the terms of its offshore debt restructuring scheme to adapt to the market environment and its actual situation, Bai Wenxi, chief economist at Hong Kong-based property services firm IPG China, told Yicai.

It remains unclear whether or not Evergrande will eventually go bust, Bai added, noting that the real estate developer's official announcement of its entrance into bankruptcy procedures is unrealistic until there is a practical solution to the issuance of unfinished residential projects. The prospect is not so bright, he pointed out.

There is likely a bigger gap between the creditors' needs and what Evergrande can offer, said Yan Yuejin, director of the E-House China Research and Development Institute. Evergrande's frequent cancellation or delay of the meetings will lead to a pile-up of discord with the creditors, thus causing new problems, Yan noted.

Last month, Evergrande filed for Chapter 15 in a US bankruptcy court in Manhattan. Chapter 15 bankruptcy protection allows foreign companies to file for bankruptcy in the US courts if they have assets in multiple countries.

As of June 30, Evergrande's liabilities tallied about CNY2.39 trillion (USD327.5 billion), with assets of CNY1.74 trillion. According to the independent auditors hired by Evergrande, the firm also faces lawsuits, arbitration cases, and other situations, with major uncertainties over its ability for sustainable operation.

Editors: Xu Wei, Futura Costaglione