Evergrande's liquidation had a profound impact on itself, its shareholders, creditors and banks.
First of all, Evergrande Group is faced with the situation that its assets are auctioned or sold, which may lead to shareholders not being able to recover all their investments, and may even face huge losses. According to the 2021 annual report released by Evergrande Group, its total assets are 238 trillion yuan, with a total debt of 197 trillion yuan. This means that shareholders' investments may shrink significantly.
Second, for Evergrande's creditors, they may only be able to recover part of what they owe. According to public data, Evergrande's creditors include banks, trust companies, bondholders, etc., with a total debt amount of more than 1 trillion yuan. Among them, banks are one of Evergrande's major creditors, and as of the end of 2021, Evergrande's bank loan balance was 554.7 billion yuan. If Evergrande is unable to repay the loan, the bank may face the risk of bad debts.
In response to this incident, Evergrande Group has taken a series of measures to alleviate the crisis. For example, Evergrande Group has sold some assets, including real estate projects, property management business, etc., to raise funds. In addition, Evergrande Group is also actively communicating with creditors to seek the possibility of debt restructuring to reduce the company's burden.
Overall, Evergrande's liquidation has had a serious impact on all parties. All parties are taking measures to deal with this incident in order to safeguard their interests. It also reminds us that companies should focus on risk management, control the size of debt, and maintain a sound financial position. At the same time, the regulators should also strengthen the supervision of enterprises to prevent similar incidents from occurring.