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Evergrande Group, one of China’s biggest lenders, is facing billions in debt with the threat of default. The crisis is sending shock waves through global financial markets, including the US, where the company is being compared to Lehman Brothers, whose September 2008 explosion triggered the Great Financial Crisis.

Granthshala Business takes a look at Evergrande’s business and its role in the world’s financial system.

Evergrande Group

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Evergrande is one of China’s leading lenders for everything from property to autos. The company has 2.3 trillion Chinese yuan in assets, which is equivalent to about $355 billion, according to the lender, which employs 200,000 workers.

By 2022, Evergrande is expected to reach 3 trillion yuan in total assets, 1 trillion yuan in annual sales, and 150 billion yuan in annual profits and taxes “one of the world’s top 100 companies.”

Billions face default

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Rating agencies say Evergrande Group is unlikely to be able to repay all of the 572 billion yuan ($89 billion), as reported by the Associated Press, which also notes that Beijing is trying to prevent systemic damage. can take steps.

“I suspect the Chinese government is on top of this, and I don’t doubt they will deal with it seriously, but I don’t think it will have the global impact that the market is suggesting this morning,” said Carlyle Group Co-Founder David Rubenstein During an appearance on “Morning with Maria” on Monday.

A US investor in China tells Granthshala Business “every bank in China has had exposure to the company,” which explains fears of heightened contagion.

American investors?

According to FactSet data, BlackRock has some stake in several units in Evergrande, while Goldman Sachs, JP Morgan and JP Morgan hold small, fractional stakes. “I don’t think the major US banks are on the hook for too much money,” Rubenstein said.

Inquiries made by Granthshala Business to these banks were not immediately returned.

anchorthe protectionThe lastChangeChange %
BLKBlackRock, Inc.847.50-27.98-3.20%
gsThe Goldman Sachs Group, Inc.375.28-15.79-4.04%
JPMJPMorgan Chase & Co.151.90-5.86-3.71%
gsThe Goldman Sachs Group, Inc.375.28-15.79-4.04%

Defending Evergrande, Managing the Crisis

As the lender’s crisis unfolds, it has attempted to assuage investors’ fears.

“The recent online comments regarding the bankruptcy and restructuring of Evergrande are completely false,” the company said on September 13. The company has indeed faced unprecedented difficulties, but the company fully fulfills its corporate responsibility, making every effort to resume work and production, guarantee the delivery of buildings, resume normal operations and fully protect the legitimate rights and interests of customers”

Evergreen Speakers and Stocks

Zhu Jiayin, also known as Hui Ka Yan, is one of the richest people in China, with a net worth of over $10 billion. according to forbes. Xu took the lender public on the Hong Kong Stock Exchange in 2009.

According to a company bio:

“The 61-year-old, Chairman of the Group’s Board of Directors and Chairman of the Real Estate Group, Professor Xu coordinates the Group’s overall growth strategy. He has over 37 years of experience in real estate investment, real estate development and corporate management. Professor Xu has been Professor of Management at Wuhan University of Science and Technology since 2003 and was appointed as the school’s doctoral supervisor in 2010.”