As Evergrande, a Chinese property company titan, looms near collapse, the world is still holding its breath.

Evergrande’s warning that it would not be able pay its debts led to financial institutions around the globe and developer alerts.

According to reports, China’s giant property company is on verge of collapsing. Asian and Western financial institutions are bracing for the worst default since Lehman Brothers failed in 2008.

Evergrande, which has debts of more than £300billion, has been struggling to meet debt repayments since September. Many of these funds are owed to companies outside China.

Chinese property giant Evergrande  is understood to be on the brink of collapse with Asian and Western banks braced for the largest default since Lehman Brothers went bust in 2008

After markets close, a spokesman for the company stated that there was no assurance the group would have enough funds to meet its financial obligations given the current liquidity situation.

Yesterday’s trading resumed, but shares plunged to an all time low. They closed down almost 20%. Since the start of the year, they have lost 88%.

Chinese officials responded to this statement by sending a team of staff to the offices. Xu Jiayin, the founder, has also been summoned to front the Communist Party.

Analysts think the group may be closer to default.

Conita Hong, Tiger Faith Asset Management’s investment director, stated that the most recent statement implied the company would’surrender’ and ‘need help’. “This is a bad sign,” she said.

UBS and Royal Bank of Canada Bluebay Asset Management are some of the direct lenders with Evergrande exposure. Blackrock is the money manager and also has this debt.

Although Standard Chartered and HSBC are Asia-focused, they do not have Evergrande debt but may still be in trouble due to their large presence on the Chinese and Hong Kong real estate markets.

Karl Clowry of law firm Addleshaw-Godard stated that “Until there is an additional announcement everyone is waiting to see whether this time will prove to be the first true trigger event.”