In Hong Kong, we build a global business empire

Chapter 172 Conditions for Financing and Acquiring Shares in Hong Kong Land Group

"Mr. Lin, I wonder what your conditions are? We come here with great sincerity. Cooperation is all negotiated. I believe that both parties will be able to reach an agreement after negotiations." Bao Fuda said patiently and threw the question to Lin Haoran.

condition?

Lin Haoran frowned. Bao Fuda’s sudden visit and his purpose were something he just learned about. He had not thought about this matter carefully.

So for a moment, it was difficult for him to answer any conditions he was asked to propose.

"Is Mr. Bao Fuda busy today?" Lin Haoran did not rush to answer, but asked.

Although he was not sure what Lin Haoran meant by this, Bao Fuda still answered honestly: "My biggest task today is to come here to discuss this cooperation with your Hong Kong Electric Group. This is the decision I made after discussing with Mr. Niu Bijian and the entire Hong Kong Land Board of Directors. I hope to do my best to reach a cooperation with you.

We have nearly a hundred years of experience in real estate development, and we also have the best marketing resources in Hong Kong. If the Hong Kong Electric Group agrees to cooperate with us, I believe you will not regret it. This is a mutually beneficial and win-win cooperation. "

In these words, they were still trying to persuade Lin Haoran to choose to cooperate with their Land Group.

After all, the value of the land at the former site of the Electric Road Power Station in North Point is so great that Swire Properties is reluctant to give it up.

"Since Mr. Bao Fuda is not busy today, you can take a rest here. I would like to discuss this matter with Mr. Chen Shoulin, the executive director of our Hong Kong Electric Group, and then make a decision. How about that?" Lin Haoran said with a smile.

"Of course no problem, I can wait!" Bao Fuda agreed directly.

Once the cooperation is reached, it will be another major project for the Hong Kong Land Group.

If this piece of land is successfully developed, it will be at least equivalent to dozens of other ordinary projects, and the Swire Group will be able to make a profit of more than hundreds of millions of Hong Kong dollars.

Moreover, this was the cautious estimate made by Niu Bijian and Bao Fuda. They even felt that if Hong Kong's real estate industry continued to soar, by the time this piece of land was successfully developed, the housing prices would have increased several times, and by then it would be possible for the profit to reach more than tens of billions of Hong Kong dollars!

With such huge profits, who wouldn’t want to take a bite?
However, neither Niu Bijian nor Bao Fuda knew at that time that in two years, Hong Kong's real estate industry would experience a major decline.

In this case, let alone making tens of billions of Hong Kong dollars, it would be good enough to be able to break even.

While Bao Fuda was still thinking about what would happen after the successful cooperation, Lin Haoran and Chen Shoulin had already walked out of the reception room and came to Chen Shoulin's general manager's office.

After entering the office and closing the door, the two sat up.

"Mr. Chen, you are a senior in the business world. What conditions do you think should be proposed if we want the Hong Kong Electric Group to obtain the greatest benefits?" Lin Haoran threw the question to Chen Shoulin, hoping to get a better idea from Chen Shoulin.

A business veteran like Chen Shoulin must have his own ideas.

“Boss, I had thought about this when Mr. Niu Bijian talked to me about it. In fact, I think there is no problem in cooperating with the Hong Kong Land Development Group. They have the best development capabilities in the field of real estate development. After the development is completed, we can use their marketing channels to promote the developed projects to the outside world.

However, it is obvious that this piece of land has indeed attracted many real estate companies, so it is reasonable to ask for more benefits. I have two ideas for the time being: one is to increase the valuation of our land, for example, increase the valuation from HK$10 billion to HK$12 billion. If they want to cooperate, they need to invest HK$6 million. In this way, we can make an extra profit of HK$1 million. They should be able to accept this condition. The profit of the former site of the North Point Electric Road Power Plant will definitely not be low after development. This is why so many people are eyeing it.

Another idea is that everything in the Hong Kong real estate market is currently developing in a good direction, which means that the prospects for the Hong Kong Land Group will be very good. After all, the Hong Kong Land Group itself is the largest real estate company in Hong Kong and owns the most properties in Hong Kong, which is unmatched by Chinese real estate companies. Therefore, we can propose a financing and share swap model for the Hong Kong Land Group to develop.

This financing-for-share swap actually means that the Hong Kong Land Group will inject funds in exchange for their shares. For example, based on the current total market value of the Hong Kong Land Group of HK$78 billion, HK$5 million is equivalent to about 6.4% of the Hong Kong Land Group's shares.

In this way, our Hong Kong Electric Group is also a shareholder of Hong Kong Land Group. In the future, we will not only be able to successfully develop the land in North Point, but also become one of the important shareholders of Hong Kong Land Group. In the future, they will make huge profits in the real estate industry, and we will also be able to get the dividends we deserve, and this dividend will be long-term!" Chen Shoulin expressed his thoughts.

Now, no one could foresee that the Hong Kong real estate industry would face a major crisis in two years, so it was normal for Chen Shoulin to have such thoughts.

Not to mention Chen Shoulin, even Li Jiacheng would not have thought that the real estate crisis would come so soon.

They know that a real estate crisis may be coming, but they will only notice it one or two years later when various signs of crisis appear as the real estate market develops.

As for today, the real estate market has not yet developed to the peak of this wave of prosperity, so naturally there are no signs of crisis.

Lin Haoran knew about the existence of the real estate crisis, but Chen Shoulin's idea gave him an idea.

He is now secretly absorbing shares of the Jardine Matheson Group, but it is not easy to absorb 30% or even more shares.

As time goes by and the number of scattered shares of the Jardine Matheson Group held by shareholders decreases, it will become more difficult for Universal Investment Company to absorb them.

However, if this cooperation allows the Hong Kong Electric Group to become a shareholder of the Hong Kong Land Group and control part of the shares of the Hong Kong Land Group, it will definitely be a great help to Lin Haoran.

After all, although the Hong Kong Electric Group is not Lin Haoran's privatized enterprise, the Hong Kong Electric Group is his holding company, which means that he has the final say over the shares controlled by the Hong Kong Electric Group.

In other words, once the Hong Kong Electric Group can really succeed in doing so, when he wants to take over the Hong Kong Land Development in the future, the Hong Kong Electric Group's shares in the Hong Kong Land Development can also be counted as his.

In this way, Lin Haoran can even allow the Hong Kong Electric Group to hold shares in the Hong Kong Land Development Group openly.

In Hong Kong, it is very normal for companies to hold shares in each other.

For example, the Huifeng Group and the Jardine Matheson Group held shares in each other. Niu Bijian, the boss of Jardine Matheson, was even a member of the board of directors of Huifeng Bank.

Cross-holding of shares like this is a very common thing among Hong Kong's top companies.

Especially among the major British banks, there are basically various complex relationships between them.

In the eyes of these British consortiums, as long as the shares held by the other party do not pose a threat to their main holdings, it is not a bad thing, but can strengthen the cooperation between the two parties. "Mr. Chen, I think your second idea is very good. Our Hong Kong Electric Group is not short of funds now. There is no need to take the hundreds of millions of Hong Kong dollars. On the contrary, it is a good opportunity to become a shareholder of the Hong Kong Land Group and enter the Hong Kong Land Board of Directors.

Hutchison Whampoa owns numerous commercial properties in Central, which are only rented and not sold. They are simply golden gooses that can only lay golden eggs. If it weren’t for Hutchison Whampoa Group’s building expansion, continuous investment of profits into new projects, and even borrowing from banks, Hutchison Whampoa Group would be able to earn considerable profits every year with the commercial properties it holds today!

In the short term, it is more cost-effective for us to take cash, but in the long term, it would definitely be a better idea for us to hold shares in the Hong Kong Land Group!" Lin Haoran also expressed his opinion.

The capital flow of Hong Kong Electric Group is very large and its profits are not low.

When Lin Haoran took over the controlling stake in Hong Kong Electric Group, the Hong Kong Electric Group had not paid dividends for more than a year.

Although the Hong Kong Electric Group will continue to invest its profits, a considerable amount of funds will remain within the group.

For example, after Lin Haoran took over the Hong Kong Electric Group, he discovered that the account funds of the Hong Kong Electric Group had reached HK$3.92 million.

This amount of money is not small.

If he chooses to let the Hong Kong Electric Group use this money to distribute dividends now, with Lin Haoran holding 49.9% of the shares, he can directly get half of it, which is nearly million Hong Kong dollars.

However, Lin Haoran has no plans to distribute dividends for the time being, as he does not lack the 100 or 200 million Hong Kong dollars in funds.

In addition, he would not explain to Chen Shoulin that he wanted the Hong Kong Electric Group to hold shares in the Hong Kong Land Development in order to lay out the Hong Kong Land Development and prepare for taking over the Hong Kong Land Development in the future.

No one would tell this kind of thing except him and Su Zhixue.

Even the trading team of Huanyu Investment Company, although absorbing shares of the Jardine Matheson Group, only thought that Lin Haoran wanted to make a profit by speculating in stocks.

Lin Haoran had done this kind of thing before. When he bought shares in Hutchison Whampoa, his ultimate goal was to make a profit from the price difference. That time, the boss made a lot of money.

Naturally, these traders would never have thought that the boss had such great ambitions and wanted to swallow up a behemoth like the Jardine Matheson Group.

After all, in their opinion, this is simply impossible. The Hong Kong Land Development is a behemoth with a market value two or three times higher than that of the Hong Kong Electric Group that the boss owns today.

It was not easy to take over Hong Kong Electric Group, and to take over Hong Kong Land Group? How much money would it take!

"What we are worried about now is that the other party will not agree to this method. After all, if calculated based on the current market value, 6.4% of the shares is relatively high. As far as I know, Jardine Matheson and its subsidiary Jardine Securities only hold about 20% of the shares of the Hong Kong Land Group." Chen Shoulin continued.

Lin Haoran nodded. This was indeed very likely. The fact that Hutchison Whampoa was snatched away by Bao Yugang must have made Jardine Matheson worry that it would even lose the Hong Kong Properties.

This may also be the reason why Niu Bijian finally chose to strengthen the mutual controlling rights between Jardine Matheson and Hong Kong Land Group.

"No matter what, we can give it a try. We can feel from Bao Fuda's words that the other party really wants to obtain the cooperation rights for the old site of the North Point Electric Road Power Plant. I believe they will not be willing to give up just like that!" Lin Haoran said with a smile.

In Lin Haoran's view, the cooperation intention proposed by Swire was a surprise.

If they agree, Lin Haoran can agree to cooperate with Swire.

If they don’t agree, then we won’t give Swire Properties this opportunity to cooperate. It would be better to let Wan’an Group develop this project in the future.

After some discussion, the two ended the discussion and returned to the reception room.

At this time, Bao Fuda was waiting in the reception room, frowning from time to time, as if he had thought of some difficult problem.

"Mr. Bao Fuda, after I discussed with our boss, we decided to give the Jardine Matheson Group a chance to cooperate. However, this cooperation will not be exactly as you said just now. We hope that the Jardine Matheson Group can exchange our cooperation in the form of equity financing, based on the market value..." Chen Shoulin told Bao Fuda exactly what he and Lin Haoran had discussed.

After listening to this, Bao Fuda looked surprised.

I didn't expect the other party to make such a request.

But not long after, Bao Fuda replied: "Mr. Lin, Mr. Chen, this matter is of great importance. I cannot make a decision easily. I need to go back and discuss it with Mr. Niu Bijian and hold a board meeting before making a decision!"

Bao Fuda didn't care about this suggestion, but he was considering it from the perspective of the Jardine Matheson Group, so naturally there was no problem.

But Bao Fuda knew that it was useless for him to agree on behalf of the Jardine Matheson Group, and he needed the agreement of Jardine Matheson.

This may be related to the complex factors of Jardine Matheson's control over the Hong Kong Land Group.

Although it seems that Hong Kong Electric Group has no chance of acquiring Hong Kong Land Development, as the saying goes, it is better to be safe than sorry.

Ever since Wharf Holdings was acquired by Pao Yu-kong, Jardine Matheson has become a frightened bird.

Therefore, Bao Fuda felt that it was enough to leave the matter to Jardine Matheson to decide, and he did not need to think too much about it.

"Okay, Mr. Bao Fuda, you can go back and discuss it. I'll wait for your reply." Lin Haoran said with a smile.

He accepts the cooperation with the Hong Kong Land Group regardless of success or failure.

Cheng, he now has another helper in acquiring the Hong Kong Land Group.

If that doesn't work, then the land at the old site of the North Point Electric Road Power Plant will be given to Wan'an Group for development so that they can make more profit from it!
(End of this chapter)