Property giant China Evergrande Group has said that it cannot sell properties and other assets fast enough to service its massive $300bn debts, and that its cashflow was under “tremendous pressure”. Only hours after angry investors besieged its Shenzhen headquarters and the company denied it was set for bankruptcy, Evergrande issued a statement to the Hong Kong stock exchange saying that a significant drop in sales would continue this month, which was likely to further deteriorate its liquidity and cash flow. The company blamed “ongoing negative media reports” for dampening investor confidence, resulting in a further decline in sales in September – usually a strong month for sales in China. Evergrande also said two of its subsidiaries had failed to discharge guarantee obligations for 934m yuan ($145m) worth of wealth management products issued by third parties. That could “lead to cross-default”, it said. And in a sign that restructuring plans are speeding up, the board also said it had appointed advisers to “assess the group’s capital structure, evaluate the liquidity of the group and explore all feasible solutions to ease the current liquidity issue”. Shares in the group closed down nearly 12% in Hong Kong on Tuesday. The statement also said it had failed to find a buyer in the distressed sale of its electric vehicle and property service subsidiaries, prompting shares in those businesses to fall by 25% and 12% respectively. Evergrande is one of the world’s most indebted companies, and has seen its shares tumble 75% this year, sparking fears among analysts of “a risk of contagion” spreading through China’s overheated property sector and also its banking system. Years of borrowing by Evergrande to fund rapid growth has combined with a crackdown on the industry by Beijing to fuel the crisis. The dramatic announcement on Tuesday follows a turbulent day on Monday which saw increasingly desperate protests by small investors and homebuyers demanding their money back. Chaotic scenes erupted at the company’s headquarters in Shenzhen as around 100 disgruntled investors crowded into the lobby to demand repayment of loans and financial products. More than 60 security personnel formed a wall in front of the main entrances to the towering skyscraper in the southern city where protesters gathered to shout at company representatives. Du Liang, identified by staff as general manager and legal representative of Evergrande‘s wealth management division, read out a repayments proposal for those who held wealth management products, according to financial media outlet Caixin, but protesters at the company’s headquarters appeared to reject it. “They said repayment would take two years, but there’s no real guarantee and I’m worried the company will be bankrupt by the end of the year,” said a protester surnamed Wang, who said he works for Evergrande and had invested 100,000 yuan ($15,500) with the company, while his relatives invested about 1m yuan. Hundreds of people in recent months have also protested on an online forum set up by the People’s Daily, the official newspaper of the Chinese Communist party, seeking government help. Many analysts believe Evergrande will be forced to restructure its debt and possibly faces being dismantled under a government-orchestrated operation to ensure a soft landing that does not capsize the country’s bloated property market. But late on Monday, Evergrande responded to the speculation that it was facing a restructuring as “totally untrue”. “The recent comments that have appeared online about Evergrande‘s restructuring are completely false,” the company said in a statement. It went on to say the company “is indeed facing unprecedented difficulties at the moment, but it will firmly carry out its main corporate responsibilities, fully dedicate itself towards the resumption of work and industry”. The group will “protect housing transactions (and) intends to do everything possible to restore normal business operations, and fully guarantee customers’ legal rights and interests”, the statement added. However, the group faces serious financial problems and the statement on Tuesday appeared to lay bare the magnitude of the crisis which has seen its bonds fall to less than 75% face value in some cases. Some trading was suspended again on Tuesday amid wild swings in prices. After highlighting its problems raising cash from the firesale of properties and other assets, it said: “In view of the difficulties, challenges and uncertainties in improving its liquidity, there is no guarantee that the group will be able to meet its financial obligations under the relevant financing documents and other contracts. “If the group is unable to meet its guarantee obligation or to repay any debt when due or agree with the relevant creditors on extensions of such debts or alternative agreements, it may lead to cross-default under the group’s existing financing arrangements and relevant creditors demanding acceleration of repayment. This would have a material adverse effect on the group’s business, prospects, financial condition and results of operations.” According to Caixin, Evergrande on Monday proposed that investors choose to accept 10% of the principal and interest of the matured product now and the rest via 10% instalments quarterly, payment by property assets, or by using the outstanding product value to offset home purchase payments. On Friday, Evergrande vowed to repay all of its matured wealth management products as soon as possible. Many buyers of Evergrande-built homes have expressed concern about down-payments made for projects now suspended by the property firm, airing concerns on Weibo, China’s Twitter equivalent. A report last week by Capital Economics said Evergrande had 1.4m properties it has committed to completing, as of the end of June. Analysts at the Hong Kong-based market intelligence firm Reorg described in a recent report how the disputes over contractor payments intertwined with Evergrande’s large exposure of unfinished properties that buyers – as is common in China – have already paid for upfront. “In extreme cases, if China Evergrande fails to complete pre-sold property projects on time, due to inability to pay contractors, China Evergrande will be liable to the purchasers for their losses,” Reorg said. “In line with industry practice, the group pre-sells properties prior to their completion – as a result, banks providing financing to end purchasers require China Evergrande to guarantee their customers’ mortgage loans. If a purchaser defaults on a mortgage loan, the group may have to repurchase the underlying property by paying off the mortgage.”