By Xie Yu and Li Gu
HONG KONG/SHANGHAI China's Gemdale saw its stocks and bonds plunge on Tuesday after the resignation of its chairman, as investors took no chances amid the debt crisis in the key real estate sector.
Ling Ke, 64, had resigned due to health reasons, Shanghai-listed Gemdale announced on Monday evening, adding that he would be replaced by company president Huang Juncan.
It did not elaborate on the health reasons.
Chinese media outlet Yicai on Tuesday quoted a separate company statement as saying that Ling's resignation was a normal transfer of management responsibilities and would not have a big impact on the firm's operations.
However, investors concerned about the broader debt problems in China's property sector sold off the stock, which dropped by the daily 10% limit in afternoon trading in Shanghai.
Gemdale's onshore bonds maturing in 2024, 2025 and 2026 also tumbled 25%, 21% and 20% respectively before they were suspended from trade.
"Investors are worried about Gemdale's financial condition as the resignation of its chairman was a surprise," said Ting Meng, a credit analyst at ANZ Bank China.
Gemdale has a total debt of 21.1 billion yuan ($2.88 billion) in the form of bonds due by the end of 2024, according to LSEG data.
The developer's $480 million dollar bonds, to mature next August, were being bid around 20 cents against the dollar, almost half from levels earlier this month, traders said.
Gemdale did not immediately respond to a Reuters request for comment. It ranked as China's 8th largest developer last year, according to private research firm China Real Estate Information Corp.
It had sales of 221.8 billion yuan ($30.3 billion) last year and its financial fundamentals were stable, the company said in its annual report published in April.
($1 = 7.3149 Chinese yuan)
(Reporting by Xie Yu in Hong Kong and Li Gu in Shanghai; Editing by Edwina Gibbs and Miral Fahmy)
