China Evergrande Group's stock dropped to its lowest since mid-2018 Tuesday after a China court ordered the freezing of bank deposits owned by one of its subsidiaries. The court order sparked concerns over the company's financial situation.

The share price of the developer sank to HK$8.18 at Monday's close and were last at HK$7.27 Tuesday - a fall of 11.2%. The dip occurred shortly after a court in Jiangsu province ordered the freezing of more than $20 million worth of bank deposits held by Evergrande subsidiary company Hengda Real Estate Group.

It is China's second-largest property developer by sales, making it the 152nd largest group in the world by revenue, according to Fortune magazine.

Sources said the court order was issued earlier in the month but the news was largely kept private. Investors who were already wary of China Evergrande's financial health were spooked by the news, analysts said.

"Overall, we view this as negative news, indicating weakening bank channels which should further pressure [the group's] liquidity," analysts at Nomura said.

The order to freeze Hengda Real Estate Group was requested by China Guangfa Bank - a commercial lender based in southern China. Sources said the request was made because of a disagreement over China Evergrande's early payment of an existing loan.

On Tuesday, China Evergrande said the loan it owed Guangfa Bank is still due in March 2022. The company said it plans to file a countersuit against the bank.

China Evergrande is currently China's most heavily indebted property developer. Over the past few years, the company has been struggling to reduce its leverage as the government intensified its crackdown on high volatility stock and bonds.

The company benefited from decades of urbanization in China. The boom in its business made its chairperson, Hui Ka Yan, one of the country's richest men. However, years of rapid growth also resulted in unsustainable liabilities.

China Evergrande is currently one of the country's largest borrowers in the dollar-denominated bond market.

Last month, U.S.-based credit rating company Fitch Rating downgraded China Evergrande's rating, stating that it needed to significantly downsize its business to reduce its overall debt. The company has recently embarked on a series of asset sales to shore up its finances. In June, the company generated $570 million in cash from the sale of its stake in an internet company and a Hangzhou-based property developer.