China’s Evergrande Real Estate Group.Brent Lewin | Bloomberg | Getty ImagesSINGAPORE — Shares of China Evergrande plunged on Wednesday, after the indebted Chinese property developer said it had placed new shares at a discount.On Wednesday morning, its Hong Kong-listed shares dived more than 16%.The cash-strapped developer, China’s second-largest by sales, announced it raised 4.3 billion Hong Kong dollars ($555 million) in estimated gross proceeds from a share placement — a figure that fell far short of its targeted $1.1 billion. It sold 260.65 million shares at 16.50 Hong Kong dollars per piece.China Evergrande said that it would use the cash raised to refinance its debt.The cash-strapped company was downgraded by S&P Global Rating from “stable” to “negative” recently. The ratings giant explained that Evergrande’s liquidity was weakening, and its short-term debt has continued to surge partly due to its acquisition of property projects.As of June 30, China Evergrande had short-term debt of 396 billion yuan ($58 billion), according to S&P.A leaked document last month also suggested that China Evergrande had sought help from the Chinese government due to a supposed cash crunch. The company has since denied the allegations in the document.Evergrande’s problems have also been made worse by China’s crackdown on the real estate sector, as the country seeks to rein in the large amount of borrowing by property developers. The property sector in general accounted for 28.7% of the $24.4 trillion worth of outstanding yuan loans issued by China’s banks in the second quarter, according to Reuters.China’s property developers are also among the biggest junk bond issuers in Asia.Authorities are expected to soon kick in rules that cap the ratios of their debt in relation to their cash flows, assets and capital levels.