Shares in the debt-ridden Chinese firm Evergrande have been suspended amid speculation a rival is set to take a majority stake in its property services arm.

Evergrande, which is understood to have missed at least two payment deadlines, has been struggling to avoid defaults amid a crackdown on corporate debt levels initiated by authorities in Beijing to protect the domestic economy.

The company has a debt pile above $305bn – a sum that has raised fears about the knock on effects of any collapse on the Chinese economy and the exposure of international banks to its bonds.

While markets in mainland China were closed on Monday for a holiday, it was revealed that Hong Kong-traded shares in both Evergrande and Evergrande Property Services had been suspended at the company’s request.

A number of state media reports suggested that Hopson Development Holdings was planning to acquire a majority share in Evergrande Property Services Group.

Hopson said it had also requested a suspension in trading of its own shares “pending the release of announcement(s) in relation to a major transaction of the company under which the company agreed to acquire the shares of a company… listed on the stock exchange.”

There has been no further comment from either side.

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It was unclear when any announcement would be made but such a deal would potentially give the parent firm some breathing space as it seeks to repair the gaping holes in its finances built up through the frenzied construction of apartment complexes, shopping centres and office towers over the years to meet demand.

Evergrande has been selling off various assets to try to alleviate the debt problem – with the Chinese authorities providing avenues, short of a bailout, to try and avert a messy collapse.

Just last week, Evergrande sold its stake in state-owned Shengjing Bank to cover its debts to the lender, while the country’s central bank has boosted market liquidity in a bid to maintain calm.

The uncertainty over Evergrande’s fate helped push market sentiment lower with the Hang Seng in Hong Kong losing 2.3% of its value.

Francis Lun, CEO of Geo Securities in Hong Kong, told the AP news agency that a takeover of the company’s property management arm would be one step in restructuring it by splitting it into smaller entities.

“The central government might ask local governments in turn to provide funding for Evergrande to finish its many incompleted projects so that they can be delivered or sold to buyers, enabling the developer to pay its contractors.

“As far as the Chinese government’s concerned, this is the best way forward. And of course, in doing so, I think some creditors will be hurt, mostly overseas creditors,” he added.

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