Evergrande missed payments in late September and early October to investors in US dollar-denominated bonds issued abroad.
Investors are at risk of large losses at the end of 30-day grace periods as the cash-strapped property developer wrestles with more than $300 billion in liabilities.
Chinese Estates, which owned about 6.5 percent of Evergrande's equity capital as of September 10, sold $32 million worth of its Evergrande stake. The company is preparing to sell its entire holding.
Chinese property titan Evergrande's debt burden remains significant but it urges the market to calm down while the government is mute on the issue despite expectations that it will come forward to help the embattled firm.
The fear of possible defaulting of Chinese real estate giant Evergrande has caused broad sell-off in global financial markets, even causing a dip in cryptocurrencies.
Evergrande, one of China's biggest developers, is on the brink of collapse as it wallows in debts of more than $300 billion.
The debt-ridden real estate developer is facing protests from investors who fear the company can go bankrupt.
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