China Evergrande Group announced on July 31, that one of its subsidiaries, Evergrande Group (Nanchang) Co. Ltd., had been forced to pay a guarantor of 7.3 billion yuan ($1.08 billion) for breaching its debt obligations.

The guarantor, who was unidentified in the announcement, gave a guarantee for borrowings made by some firms under Evergrande's control in July 2021, the company said in a statement to the Hong Kong stock exchange. In order to give counter-guarantees, Nanchang pledged 1.3 billion shares of Shengjing Bank Co. Ltd. that it owned in total.

Evergrande stated in a statement that "as the borrowers failed to repay the loans, the applicant carried out its obligations under the guarantee and claimed against the subsidiary under the pledge." Evergrande revealed how it intends to restructure its foreign loans in a long-awaited announcement on Friday.

The company announced that as a sweetener, it will provide its offshore creditors with asset packages that may include shares in its foreign companies, including a company that sells electric vehicles and offers property services. However, several people felt that the proposal was lacking in specifics regarding how Evergrande intended to reorganize its enormous liabilities.

Evergrande was once the most successful real estate developer in China, but it has been struggling for months under the burden of more than $300 billion in debt, of which about $20 billion is held by investors outside of China.

The statement comes as China's real estate industry, which makes up nearly a third of the second-largest economy in the world, is experiencing severe liquidity constraints. Investors are alarmed by a string of debt defaults involving some of the nation's highly indebted developers because they worry about a sectoral contagion.

According to estimates, the value of the real estate market in China was reduced by more than a trillion dollars in 2017. Two of Evergrande's top executives resigned last month after an internal investigation revealed that they had abused about $2 billion in loans. The business claimed to have discovered that chief executive Xia Haijun and chief financial officer Pan Darong were responsible for using the property services unit's secured loans for the benefit of the entire group.

In a five-page statement released by the company's founder and chairman Hui Ka-yan, Evergrande stated that it "looks forward to a constructive dialogue with the onshore and offshore creditors and gain their timely support... to better manage various businesses, treat onshore and offshore creditors fairly, and safeguard the rights and interests of all stakeholders in accordance with the law."