(Bloomberg) -- Shares of China Evergrande Group’s offshore units are fluctuating after their heavily-indebted parent received a liquidation order from a Hong Kong court, raising questions over their future ownership.

China Evergrande New Energy Vehicle Group Ltd. shares fell 13% before trimming most of the losses. Evergrande Property Services Group Ltd. was down as much as 9% before paring. While trading in the parent is still halted, the subsidiaries applied for a resumption after yesterday’s suspension.

The two units are some of Evergrande’s most prominent offshore assets, with a combined market value of $857.4 million as of Monday. More than 90% of the company’s assets are in mainland China, where Hong Kong’s courts have limited recognition, underscoring the challenges liquidator Alvarez & Marsal will face in working out the claims on the world’s most indebted-developer. 

“The two subsidiaries of Evergrande will face lots of uncertainties as China Evergrande Group heads for liquidation,” said Raymond Cheng, head of China and Hong Kong research at CGS-CIMB Securities. “Both companies will have difficulties in maintaining their business, which will dampen investor confidence.” 

Evergrande’s offshore restructuring plan covers $17 billion of dollar bonds holders and $14.7 billion debt claims of other offshore liabilities, according to its restructuring document dated March. It has overall liabilities exceeding $300 billion. 

Evergrande owns about 59% in New Energy Vehicle and about 50% in Property Services, according to Bloomberg-compiled data. 

Whether the court’s reach will extend to Evergrande’s assets in mainland China remains to be seen, as most of its projects onshore are operated by its local units that may be hard for the offshore liquidator to seize. 

“It’s hard to know whether the HK ruling results will be implemented well in mainland China and it may take time,” said Cheng.

But Hong Kong has a mutual recognition agreement on insolvency and restructuring with the Supreme People’s Court of the PRC that applies in parts of China, including Shanghai, Shenzhen and Xiamen, UBS Group AG analysts including John Lam wrote in a note. The winding-up order may apply to its assets in these cities, he said.

A Bloomberg gauge of Chinese developers fell as much as 2.6% Tuesday.  

Shares of China Evergrande Group plunged 21% before trading was suspended following the court’s order. The builder was valued at just $275 million on Monday, down more than 99% from its peak. Trading in Evergrande shares will remain halted until further notice, according to a company filing to the Hong Kong stock exchange.

“Evergrande’s liquidation is set to deal another blow to China housing sentiment as it negates recent policy efforts to prop up the market by easing loan rules and property-project financing, and rolling back home-purchase curbs,” Bloomberg Intelligence analyst Kristy Hung wrote in a note.

--With assistance from John Cheng.

(Updates with stock prices, backgrounder throughout)

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