HONG KONG -- The board of China Evergrande Group decided Tuesday to abandon a plan to declare a special dividend after a backlash from investors and banks, sending shares in the world's most indebted developer sharply lower.

Evergrande shares sank 11.3% during the morning trading session in Hong Kong to HK$5.95, a four-year low. The stock has declined more than 40% during July alone.

Adding to the pressure, S&P Global Ratings cut Evergrande's credit score on Monday evening by two notches to B-, noting "recent weakening in Evergrande's funding access."

Evergrande has been hit by a string of blows since it unveiled the surprise dividend proposal two weeks ago. Last week, a court froze a 132 million yuan ($20.35 million) bank deposit belonging to Evergrande at the request of creditor China Guangfa Bank, sales were halted on company projects in a city in Hunan Province and several banks in Hong Kong stopped new mortgages for its developments there.

The planned payment would have been Evergrande's first special dividend paid since 2018, but given its cash woes, some analysts expected the company to award shareholders with stock in the group's Hong Kong-listed electric vehicle unit China Evergrande New Vehicle Group. This would have allowed it to remove the unit's debt unit from its balance sheet.

But Evergrande said Tuesday that the decision not to proceed took "into consideration the current market environment, the rights of the shareholders and creditors, and the long-term development of the various businesses under the group."

Evergrande is closely tracked by regulators, investors and rating agencies concerned about the potential for contagion across China's $50 trillion financial system should the company default on loans from banks and trusts.

It has been under pressure since early 2020 as it has tried to safely descend from a mountain of liabilities. Despite its claims to be making progress with debt reduction, outstanding liabilities grew 5.4% to $301 billion last year. While the company has reduced so-called interest-bearing liabilities by repaying bonds, a rise in bills payable to suppliers has climbed faster.

Evergrande has not defaulted on any of its bonds, but some units have missed payments on bills payable this year.

It had only 158.8 billion yuan in cash and cash equivalents at the end of 2020, against 335.5 billion yuan of borrowing due over the following 12 months, according to its last annual report.