Embattled property giant China Evergrande suspended trading in its shares in Hong Kong on Monday pending an announcement on a “major transaction” , as the firm struggles in a sea of debt and faces a default.

The halt came as reports said Hong Kong real estate firm Hopson Development Holdings planned to buy a 51 per cent stake in Evergrande's property services arm as the troubled giant tries to offload assets to meet its obligations.

“At the request of the company, trading in the shares of the company was halted at 9am on October 4, pending the release by the company of an announcement containing inside information about a major transaction,” Evergrande said in a statement to the Hong Kong stock exchange.

Trading in Hopson was also suspended “pending the release of announcement(s) in relation to a major transaction”, according to a company statement to the exchange.

Bloomberg Intelligence analyst Patrick Wong said the suspension may be related to a major asset disposal or capital restructuring.

Evergrande Property Services Group was also suspended but the firm's electric vehicle company, which last week scrapped a proposed Shanghai listing, continued to trade and rose nearly 30 per cent. Hong Kong’s Hang Seng Index lost more than two per cent.

Officials at the firm have been struggling to deal with a crisis that has left it more than $300 billion in debt, fuelling fears of a contagion for the wider Chinese economy that some warn could spread globally.

Last week, it said it would sell a $1.5 billion stake in a regional Chinese bank to raise much-needed capital, as it struggles to make interest payments to bondholders.