By P.R. Venkat and Clarence Leong

China Evergrande Group has appointed financial advisers to assess its capital structure and explore ways to ease the cash-strapped conglomerate's liquidity issues.

Houlihan Lokey (China) Ltd. and Admiralty Harbour Capital Ltd. have been appointed as joint financial advisers, China Evergrande said Tuesday.

The company said it expects contracted property sales to continue to decline in September, which is typically a month of higher property sales in China.

"However, the ongoing negative media reports concerning the group have dampened the confidence of potential property purchasers in the group," it said.

The continuous decline in contracted property sales will weigh on cash collections, which in turn puts tremendous pressure on the group's cash flow and liquidity, the company said.

Shares of China Evergrande slid 12% to an intraday low of HK$2.98 on Tuesday morning following news of its financial stress. The stock has fallen 80% so far this year and is on track to close below its initial-public-offering price for the second straight session. Its property-management and electric-vehicle units, which are also listed in Hong Kong, were last down 7.6% and 22%, respectively.

Global investors that hold Evergrande bonds have driven prices of its debt securities below US$1.00, indicating that they think there is a high likelihood of default. The company is China's largest junk-bond issuer, and borrowed aggressively both onshore and offshore to fund its rapid expansion in recent years.

Evergrande found itself in a tight spot after Chinese regulators told the country's real-estate developers in late 2020 to reduce leverage before taking on additional debt.

The company said it has been actively exploring selling its interests in various units, including China Evergrande New Energy Vehicle Group Ltd., but has yet to make any significant progress.

The Shenzhen-based group had the equivalent of about US$88 billion in borrowings at the end of June, 42% of which are due in less than a year. It disposed of US$2.2 billion of assets in the first half of the year.

Write to P.R. Venkat at venkat.pr@wsj.com and Clarence Leong at clarence.leong@wsj.com

(END) Dow Jones Newswires

09-14-21 0020ET