novellhall Chapter 34: Laying the Foundation for "Qingzhou Yingni"
Chapter 34: Laying the Foundation for "Qingzhou Yingni"
The following afternoon.
Agent Wang Fusheng placed a thick folder on his desk.
"Young Master Li, here are the documents you requested." After putting them down, he seemed hesitant to speak, but finally gritted his teeth and said, "If Young Master Li wants Qingzhou Yingni, it might be a bit troublesome, but... there are still ways to acquire it at a premium."
Upon hearing this, Li Jiagang immediately put down the documents in his hand. "Agent Wang, do you know something? Before you finished speaking, your eyes were sharp as you stared at Wang Fusheng: "Tell me, what is it?"
"Mr. Li... Mr. Li, it's like this," Wang Fusheng stammered, "I have a good relationship with an agent at Jardine Matheson Investments, and I heard about you from him."
"What is it?"
"It seems that Jardine Matheson has blacklisted you because of the Wharf Holdings incident."
Upon hearing this, Li Jiagang's lips curled up slightly.
However, he suddenly remembered what Wang Fusheng had just said, and his face turned ugly again.
"You mean Jardine Matheson owns a large stake in Ching Chau Cement, and if I want to acquire it, I have to go through Jardine Matheson?"
Wang Fusheng nodded at first, but then shook his head: "Jardine Matheson only holds less than 10% of the shares." He then opened the documents and pointed to them, telling Li Jiagang: "Hongkong Land also holds 5% of the shares, and Hutchison Whampoa, Wheelock and Swire each hold 5% of the shares. These foreign firms together hold 30%."
"If they join forces, then if you want to control Yingni in Qingzhou, you will have to achieve absolute control, otherwise it will definitely be difficult to control them."
"Does Mr. Li intend to acquire absolute control?"
Li Jiagang did not respond to Wang Fusheng, and continued to look at the documents. After a moment...
"What can you do to achieve absolute control?"
"Young Master Li, please take a look," Wang Fusheng turned to another page for Li Jiagang to see, "I have investigated and found that Qingzhou Yingni Company currently has many problems."
"First: Since 66, this company has suffered from low management efficiency, outdated equipment, and weak profitability, resulting in a large number of its shares being listed on the market but no one paying attention to them, far exceeding 15% of the total shares."
We can acquire a portion of the equity through the market, thus gaining the upper hand.
Second: More than 25% of the equity is controlled by various institutional investment companies, local Hong Kong banks through asset mortgages, and trust financial investments.
These companies are absolutely capable of being transacted if the interests are right; I recommend acquiring them at a premium.
Third: Public shareholders hold approximately 25%-30% of the shares, mostly small and medium-sized investors, dispersed among retail investors and brokerage firms in the Hong Kong stock market.
"My suggestion is to proceed simultaneously from all three sides: acquiring publicly traded shares, institutional and bank-pledged shares, and publicly traded shares at the same time."
"Before the foreign firms can react, we should acquire more than 51% of the shares as soon as possible."
"Of course, if Mr. Li is willing to pay a premium of about 5%, I am confident that I can secure Qingzhou Yingni Company for you within a week."
Wang Fusheng assured him with full confidence.
Li Jiagang has not responded immediately.
After thinking for a long time...
What is the current market value of Qingzhou Yingni?
"The market value is around HK$2.5 million."
"The share capital increased to 77 million shares in 7800, and the current market price is HK$3.2 per share."
"Compile a list of data for me right away," Li Jiagang handed him a blank sheet of paper: "If we acquire everything at a 5% premium, how much will I need to spend? Calculate all the expenses accurately."
"Yes, Young Master Li."
It will take about a few minutes.
"Young Master Li, the calculations are complete," Wang Fusheng handed him the calculated figures: "Acquiring 51% of the shares at a 5% premium, plus other expenses, will cost approximately HK$1.4 million."
"Another 1.4 million?"
Lao Tzu made 1.4 million from investing in Wharf Holdings, and now he wants to acquire 51% of Qingzhou Yingni's shares, for another 1.4 million.
So everything was pre-arranged, right?
Li Jiagang was internally complaining.
He thought about it for a long time...
"Go and make contact first, but remember, be very careful. I don't want this news to get out, understand?"
"Young Master Li, you can rest assured that I'll handle things."
"Go."
After Wang Fusheng left, Li Jiagang's gaze swept over the documents Wang Fusheng had left behind once more.
"Qingzhou Yingni" is the only cement producer in Hong Kong, and its monopoly position is unshakable.
In the next thirty years, Hong Kong will enter a real estate boom, with skyscrapers and crisscrossing roads. Every inch of concrete will rely on cement.
For him, acquiring "Qingzhou Yingni" was not just a business, but a lifeline.
Meanwhile, it was anticipated that Li Ka-shing would not enter the market until November, and in early 1979, he announced that he would hold 30% of Qingzhou Yingni's shares, becoming the largest shareholder. After joining the board of directors, he successfully assumed the position of chairman.
Now it's late September, and Li Ka-shing will quietly enter the market in a month. He must seize Qingzhou Yingni before he enters the market.
Avoid all conflict.
Therefore, he must raise the money within this month to complete the acquisition of Qingzhou Yingni.
Right now, he's worried about how to make money. His gold investment hasn't reached the settlement date yet, so the money can't be recovered.
His electrical products have definitely been launched and sold within a month, but it's impossible for them to recoup 1.5 million in such a short time, right?
"Does this mean we have no choice but to borrow from HSBC again?"
"But what reason could you give to borrow from HSBC?"
"Are you going to explicitly state that you want to acquire Qingzhou Yingni, and then use the corresponding equity as collateral?"
Would HSBC be willing?
Li Jiagang thought about it a lot, but he still couldn't make a decision. Subconsciously, he didn't want to go to Shen Bi again or ask HSBC for a loan.
He didn't want to knock on HSBC's door so easily anymore.
Each act of assistance from Sir Michael Sandberg was like an invisible thread, binding him even tighter to that financial empire. It wasn't that he was unwilling to be grateful, but rather that he knew all too well that in Hong Kong, favors were more valuable than interest.
The debt of gratitude is the hardest to repay.
However, if he doesn't go to HSBC and tries to get a loan from other banks, even if he mortgages all of Qingzhou Yingni's shares to the banks, he will not be able to get a full loan from other banks.
This is his current predicament.
"Knock knock knock!!!"
Just then, there was a knock on his office door.
"Come in."
Huo Jianning walked in slowly.
"Oh, it's Jianning. What brings you here?"
"Chairman, a construction team has been dispatched to survey the old power plant in North Point." He then took out a blueprint: "This is the redevelopment plan, which you need to review and sign."
Li Jiagang took the plan but didn't look at it immediately; instead, he put it aside.
Suddenly, Huo Jianning asked, "Jianning, do you think that if a person wants to do great things, should they take a gamble and go all in, or should they proceed cautiously step by step?"
Huo Jianning was taken aback, then said, "In my opinion, going all in is gambling with your life, while proceeding step by step is the way to long-term success. But if the opportunity is fleeting, you have to be willing to bet everything when the time comes."
Li Jiagang smiled, a sharp glint in his eyes: "Well said."
He suddenly pulled open the drawer, took out a document with the title "Qingzhou Yingni Equity Distribution" written on it in large characters. "Jianning, this is what my agent just gave me."
Huo Jianning opened the document and went straight to the key points, quickly understanding its contents.
"Chairman, logically speaking, acquiring Qingzhou Yingni's shares should be quite easy. What are you doing...?"
"Funding issues."
"funds?"
Huo Jianning looked even more puzzled.
He knew that Li Jiagang had reaped more than HK$100 million in the "Wharf Holdings" incident.
Why would I be worried about money?
"Chairman, based on Qingzhou Yingni's market value, even acquiring 51% of the shares shouldn't be too much of a financial burden for you, right?"
Li Jiagang understood what Huo Jianning meant.
"I have a use for the money Wharf Holdings made."
"Jianning, do you think I should go to HSBC again to ask Shen Bi to lend me the full amount of funds to acquire Qingzhou Yingni Company? If I do that, I will definitely owe Shen Bi another favor, and I don't want to get too involved with HSBC."
Huo Jianning was silent for two seconds, then said solemnly, "Chairman, there are vested interests involved in the loan; how can we talk about personal relationships?"
"There is indeed a conflict of interest involved in the loan, but you know the situation with Qingzhou Yingni. No bank could possibly lend the full amount."
"If Shen Bi were to agree, wouldn't that be a favor?"
Huo Jianning smiled faintly upon hearing this: "Chairman, you're overthinking it."
"The fact that Sir Michael Sandberg is willing to lend you the full amount shows that he has high hopes for you, believes you are a worthwhile investment, and that you have a promising future. Isn't retaining a client like you ultimately for HSBC's benefit?"
"I didn't think this was a favor."
"If the chairman is worried about owing Shen Bi a favor, he can simply pay more interest."
Upon hearing this, Li Jiagang seemed to be deep in thought.
After repeatedly pondering Huo Jianning's words, his mind gradually cleared, and one could even say that he suddenly understood.
The worry on his face vanished instantly: "Jianning, it still has to be you."
Li Jiagang sighed inwardly.
Fortunately, he met Fok Kin-ning before Li Ka-shing, otherwise he would have gone to Cheung Kong Holdings.
Huo Jianning will definitely become a formidable opponent for him, at least this kind of person is neither a time traveler nor a reincarnated person.
But his long-term thinking is truly unmatched by ordinary people, and that alone is enough to be quite terrifying.
With Huo Jianning's help, the problem was solved.
At this moment, he had already made up his mind and knew how to handle the matter of "Qingzhou Yingni".