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Thursday, September 16, 2021
4 possible scenarios for indebted Evergrande
ANBOUND

Whether China Evergrande Group could go through the debt crisis has trigger broad concerns in China and around the globe. There are four types of possible scenarios for Evergrande (formerly called the Hengda Group, the real-estate developer).

One is to bring in other property giants or investors who would help Evergrande out of trouble; the second is that the government would step in with liquidity support; the third is the sudden default and a messy bankruptcy restructuring whose creditors will suffer major losses; the fourth is to achieve orderly restructurings under the government's leadership.

In terms of Evergrande's massive businesses and nearly RMB 2 trillion ($300 billion) in liabilities, it is difficult for any Chinese companies who could afford. In case that the firm would go disorderly to have the bankruptcy settlement, the worst for Evergrande, it would also cause a turmoil in both the real estate market and the financial system.

Therefore, the government bailout to lead the debts orderly restructuring might be a choice relatively safe .

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