Feb 3, 2024 - Economy

Chart: Evergrande towers over list of global bankruptcies

Data: Debtwire; Chart: Axios Visuals
Data: Debtwire; Chart: Axios Visuals

Chinese property developer Evergrande, which has now been ordered to liquidate, has an astonishing $300 billion in liabilities.

Why it matters: That places it near the very top of the all-time list of corporate bankruptcies.

Between the lines: A lot of Evergrande's liabilities are down payments that Chinese homebuyers made on apartments that remain unbuilt. But even just looking at the bonds and loans outstanding, the amount is greater than $80 billion.

My thought bubble: In 2020, there was a lot of talk of a "tidal wave" of bankruptcies coming as a result of the pandemic. Turns out, that never really happened. Evergrande's implosion can't primarily be attributed to COVID.

By the numbers: China is no stranger to mega-bankruptcies, as can be seen by the presence of CEFC China Energy and Peking University Financial Group on this list. But Evergrande dwarfs them all.

  • What's more, creditors' expected recovery on most of that debt is effectively zero. Insofar as there's still value in Evergrande, expect that to go to the homebuyers rather than foreign bondholders.
  • That places Evergrande in stark contrast to Lehman Brothers, which was the largest corporate bankruptcy of all time. While the investment bank had much greater total liabilities, creditors ultimately got paid back in full.
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