novellhall Chapter 99 The Angry Dog Plants a Poisonous Nail
Chapter 99 The Angry Dog Plants a Poisonous Nail
We met in the morning and arranged to meet in the afternoon.
It's obvious they're really in a hurry; they absolutely have to be! Last February, the loan interest rate was 6%, and this February it's 16%? Are you sure this isn't just a story?
It's one thing for the bank to come and collect the debt!
Even companies that aren't banks are getting involved?
Still on the topic of interest rates, investing in Hutchison Whampoa means you won't see a single dollar in dividends or interest. Instead, it's more reliable to convert stocks and assets into cash now and earn interest than to invest.
With both stocks and bonds suffering losses, and real estate being decimated, Hutchison Whampoa, with its large operations, has been hit hard and needs massive amounts of capital to survive the capital winter.
Qi Dezun, a former soldier, cut to the chase without any formalities: "How much are you offering for 20% of the shares?"
"HKD 4000 million!"
"Fifty million!"
“…………”
This price made Chen Guanjiang frown.
无线创立之初仅投资1000万港币，虽然每年都会投入500-1000万港币用于扩张，但这幺多年累计投入已达6000-7500万港币。
Normally, doubling the value to HK$1.5 million would already be an astronomical price.
Chen Guanjiang's valuation of HK$2 million not only recognizes TVB's development over the years, but also reflects the importance of this television license.
Ignoring Chen Guanjiang's grim expression, Qi Dezun continued, "Lixiaohe has already contacted me, and their offer is the same as yours! You offer HK$5000 million, and the TVB shares are yours."
That's utter nonsense!
Li Xiaohe is not Li Mingze. Where did he get 4000 million? The 1000 million Hong Kong dollars he invested in TVB at its inception were all from a joint venture with his brothers Li Rongsen and Li Rongda.
Unless they sell the United Soda Factory and the Shanghai Commercial Bank, or sell their stake in British American Tobacco Company.
But it's obvious that's impossible; no one would sell a laying hen for a hen that isn't laying eggs.
This shows they knew they were determined to acquire the shares in Wireless, and they were going to fleece this fat sheep!
"3000 million..."
"What did you say?"
"I said I'd acquire a 20% stake in TVB for HK$3000 million!"
Chen Guanjiang explained, "How about we lend another HK$3000 million to Hutchison Whampoa at an annual interest rate of 15% for a term of two years?"
Hutchison Whampoa needs cash more than ever before; it's the only bargaining chip Chen Guanjiang can offer.
"HKD 4000 million!"
Qi Dezun smiled and said, "In addition, we will lend another HK$4000 million at an annual interest rate of 10% for a term of three years."
"Then there's nothing more to discuss. Sorry to bother you..." Chen Guanjiang considered for a moment, then got up and left.
Damn it!
At the current interest rate of 16%, the interest alone on HK$4000 million would amount to HK$640 million per year, and HK$2242 million over three years.
Qi Dezun only offered HK$1324 million in interest, leaving a difference of HK$918 million. It would have been better to just spend an extra HK$1000 million to buy the shares. Why bother with such a small amount of money?
If you take the principal of HK$3000 million into account, the interest generated after three years would be enough to buy the 20% stake in TVB. It's okay to bully people, but there should be a bottom line.
"etc…"
Qi Dezun stopped Chen Guanjiang and said, no longer pressing him, "Acquire the shares for HKD 4000 million! Then, as you said, lend HKD 3000 million at an annual interest rate of 15% for two years."
"3000 million, interest unchanged."
Chen Guanjiang turned around but didn't sit down, as if he was about to leave, thinking he could always find another opportunity later.
Wireless is constantly expanding and burning through cash with no return in sight. This situation will likely continue for at least five years, and at best, Qi Dezun will just keep holding onto his shares.
If Chen Guanjiang doesn't get the shares in TVB, the weakness in the media sector will always be in Lixiaohe's hands. At worst, he can play the subservient role for a few years and invest his money in other industries.
This way, everyone loses, but it's still better than one side winning alone and then having to call the other a fool.
"Young people, they just can't keep their composure!"
Qi Dezun seemed to realize that he had gone too far, and softened his tone, saying, "Since it was Chow Shiu-nin who introduced you, I won't make things difficult for you. Let's do as you say."
Although he will need to repay HK$3967 million in principal and interest after two years, as the saying goes, "the more lice you have, the less likely you are to get bitten," Qi Dezun is now willing to borrow even with compound interest, let alone this mere 15%.
According to the development pattern of the real estate market, even if there is no recovery in two years, it will be enough for Hutchison Whampoa to climb out of the quagmire.
"etc…"
Chen Guanjiang didn't let the other party be too happy too soon. He turned around and gave him a warning, saying, "3000 million Hong Kong dollars is not a small amount. What will Hutchison Whampoa use as collateral?"
"mortgage?"
Qi Dezun was stunned for a moment. He was only thinking about fooling people and hadn't considered the mortgage at all.
Hutchison Whampoa controls seven listed companies and holds shares in more than 360 companies. Its assets have been mortgaged to banks countless times, not just once or twice.
They mortgaged everything that could be mortgaged long ago, using it all for rampant expansion and mergers. Otherwise, how could Hutchison Whampoa have risen to become the second of the "Big Four" foreign firms in just twenty years, alongside three other century-old firms?
But as Chen Guanjiang said, HK$3000 million is not a small amount, especially since it is a low-interest loan.
The other party is a British-owned trading company with such poor financial management. It's really unreasonable that there's no collateral. But the problem is that there are no collateral assets, which creates a vicious cycle.
Private loans were still not an option. Qi Dezun did not have many assets under his name. Although he was appointed as the chairman and general manager of Hutchison Whampoa, he did not hold many Hutchison shares.
Just as Qi Dezun was at a loss for what to do, Chen Guanjiang slowly spoke up: "The loan will mature in two years. If Hutchison Whampoa can't repay it, how about we convert the debt into equity based on the share price on the maturity date?"
"Of course!" Qi Dezun was surprised by such a good thing and immediately beamed with joy.
Hutchison Whampoa is far too complex, with its shareholdings so dispersed that it is impossible to even hold a single shareholders' meeting with more than 50% of the voting rights.
Qi Dezun has no intention of repaying the loan, and even if he has the money two years later, he is not prepared to repay it. Given the size of Hutchison Whampoa, which absorbed HK$3000 million in debt-to-equity swaps, this shareholder is not even a rubber stamp.
As for benefits and effects? They've long been forgotten.
The Shen family is nothing but a dog of British capital. The master himself is already mired in a quagmire, so why would he care about the dog's life or death?
Moreover, even if Hutchison Whampoa sells its shares, HSBC and Lih Siu Wah will still hold a combined 50% stake.
With the general manager having an extra vote in company decisions and the chairman having an extra vote in shareholder meetings, as long as HSBC favors the Shen family, Chen Guanjiang will never be able to obtain controlling interest in TVB.
Conversely, if HSBC turns against them, Hutchison Whampoa will be powerless to stop them, so whether they sell or not is not very meaningful.
Everyone was happy, but Qi Dezun failed to see the hint of coldness deep in Chen Guanjiang's eyes.
I went to buy it, already prepared to be ripped off, but I was still shocked and angered by the exorbitant price demanded.
Anger welled up in his heart, and evil thoughts took root in his mind, so Chen Guanjiang took the opportunity to plant a seed of discord in his heart.
They lie dormant, not yet activated, waiting for the opportune moment to prove their effectiveness!