Real estate developer China Evergrande Group was issued a winding-up order on Monday after failing to convince the High Court in Hong Kong that it had a working restructuring plan and that its assets were sufficient to cover its debts.

"I consider that it is appropriate for the court to make a winding-up order against the company as there is an obvious lack of progress on the part of the company in putting forward a viable restructuring proposal," said Judge Linda Chan's ruling in the liquidation petition hearing.

The Hong Kong court decision comes after it was reported that Evergrande's overseas creditors failed to reach an eleventh-hour deal this weekend to restructure.

Shares of the Hong Kong-listed developer plunged over 20 percent to HK$0.163 ($0.021) before they were suspended in Monday morning trade.

China Evergrande Group Executive Director Shawn Siu said he is very sorry for the liquidation order, and emphasized that the ruling involves only Hong Kong-listed China Evergrande Group, while the current management and operational systems of Evergrande Group and other domestic and overseas subsidiaries remain unaffected.

"We will actively communicate and cooperate with the liquidator to perform relevant procedures to ensure the stability of domestic business and operations, steadily advance key tasks such as guaranteeing the delivery of buildings, and promote risk resolution and asset disposal," Siu told 21st Century Business Herald.

Siu added that the "actual controllers of the real estate company have been subject to compulsory measures in accordance with the law for suspected illegal crimes, therefore the company believes that it cannot meet the relevant legal conditions for key aspects of overseas debt restructuring, making it difficult to implement the debt restructuring plan".

The developer had announced an offshore debt restructuring program in March last year.

Judge Chan on Monday appointed Tiffany Wong and Edward Middleton, managing directors of Alvarez and Marsal, as liquidators.

The first task is to retain, reorganize or continue to operate China Evergrande Group's business as much as possible, systematically retain the company's value, and increase the possibility that creditors and other equity-holders can be repaid, Wong said.

She pointed out that any feasible plan will be considered within the framework of the liquidation process, and she and her firm will contact management to understand the company's situation and discuss the next step.

China Evergrande, the world's most indebted real estate developer with arrears of over $300 billion, has estimated assets of $240 billion. It defaulted on its offshore debt for the first time in 2021.

Li Peijia, a senior analyst at Bank of China, said the liquidation of China Evergrande Group will likely have a limited impact on China's financial system.

"On the one hand, the Chinese government has provided special loan financing for developers to deliver properties, while local governments also have strengthened the organization and coordination of debt disposal by real estate companies," Li told China Daily.

"This makes it difficult for the debt risks of individual real estate companies to form a chain of risk contagion, and effectively reduces the impact of debt risk clearance of some real estate companies on financial institutions."

Liu Zhihua in Beijing contributed to this story.