Reborn Action Star: Starting in Hollywood

Chapter 408: Whose leeks-cutting technique is the best?

Proposal for inheritance division?
Lin Yuan's plan detailed the proposed division plan if the division of the inheritance became necessary, as well as the assistance that the Morgan Consortium could provide.

This plan left Mukesh Ambani silent.

It's not that he is against dividing the inheritance. He certainly understands that any human organization is afraid of having multiple brains and multiple orders.

Therefore, it was inevitable that the family would be divided early and he and his brother would each take a portion.

But the key question is, which ones should Mukesh Ambani take?

This is also the reason for the dispute between the two brothers.

Reliance Group has four core businesses: oil, energy, communications and finance.

I won’t go into details about oil, as it is mainly based on crude oil imports and refining and processing, after all, India does not produce much oil.

Energy mainly refers to a series of large enterprises with major power plants as the main source and natural gas as the supplementary source.

These two core businesses were the areas that Mukesh Ambani was mainly responsible for before the death of his father, Ambani, and they are also the parts he most wants to get.

Both of these two businesses are asset-heavy operations. Not only do they have tangible assets, they are also monopoly enterprises that can collect taxes from the public without having to participate in market competition.

As for the other two areas: communications and finance.

It is an emerging industry of the group in recent years and has developed very rapidly.

The advent of the mobile phone era has made the communications industry a money-making industry.

Not to mention the financial industry, which is an industry with the strongest capital attributes and can spend other people's money to do its own business.

In fact, Mukesh Ambani was also very interested in these two businesses, but unfortunately his younger brother had been running these two departments before.

Anil Ambani is not a mediocre person, but a master of capital operation.

He was responsible for Reliance Industries' overseas listing and bond issuance, setting the highest record in Asia's history.

It was also because of his outstanding performance in this area that he successfully established connections with the Rockefeller Group and the Citigroup, becoming their de facto allies.

Therefore, the most likely division at present is:
His elder brother Mukesh Ambani took over the group's two major businesses, oil and energy.

His younger brother Anil Ambani took over the group's financial and communications businesses.

This makes everyone happy.

In principle, his younger brother also agreed to give him these two areas, but he asked to take 80% of the group's cash flow and the remaining surrounding industries as compensation.

If the cash ratio requested by his younger brother had not been too high, Mukesh Ambani might have agreed to it long ago, and the two would not be arguing until now.

But Lin Yuan’s proposal is to use oil and finance?
He handed over the energy and communications businesses to his younger brother Anil Ambani.

What do you think?

Although Mukesh Ambani also covets the financial industry's ability to attract money, he values ​​the energy industry more as a ballast that can generate stable returns regardless of drought or flood.

After all, no matter how the economy fluctuates, can you still live without electricity?

The oil industry is subject to cyclical fluctuations. When oil prices are high, you can make a lot of money, but when oil prices are low, you may also suffer huge losses.

The electric power and energy industry is less affected by cycles and is as stable as a rock, which can hedge the risks brought by oil cycle fluctuations.

The two industries are highly complementary, and their power is multiplied when combined.

In fact, in his previous life, Mukesh Ambani held oil in one hand and the energy industry in the other. After the family split, he took every step carefully and defeated his younger brother step by step, firmly sitting on the throne of the richest man in Asia, and even once became the richest man in the world.

Therefore, Mukesh Ambani would rather give up the huge profits in finance and want to take control of the energy business.

Why did Lin Yuan make such a suggestion?
The answer is simple: it's in his and Betty's best interests.

India is not his homeland, and Mukesh Ambani is not his biological brother... Forget it, even biological brothers are not acceptable.

Anyway, for Lin Yuan, his original intention in considering the problem must be how to more conveniently reap the benefits of India.

It's impossible to really invest and do business in India honestly, right?

This may lead to the company being shut down by the dishonest Indian government and being severely blackmailed.

After this trip to India, Betty also came to a clear understanding: when investing in India, never try to make long-term investments, and don't consider integrating common prosperity with local people's livelihood.

Because there is no such soil.

The only correct answer is to find a way to create a bubble, make a fortune, and then cash out and run away at the top of the mountain.

With this idea in mind, if Mukesh Ambani really gets the two major businesses of oil and energy and runs them steadily, what profit can they make?

Naturally, we have to find a way to trick him into choosing finance and handing over the energy sector to his younger brother.

From Lin Yuan's point of view, Mukesh Ambani's complete defeat of his younger brother is not necessarily a good thing.

On the one hand, the Rockefeller Foundation might be able to cut its losses and escape, thus not distracting the enemy's attention for a long time.

On the other hand, once Mukesh Ambani completely defeats his younger brother, Lin Yuan and Betty will no longer be of any value, and he will inevitably try to get rid of them and eat all the food alone. This is determined by the nature of Indians.

Therefore, if his younger brother Anil Ambani can get the energy business, it means that he has a very stable base. At least when facing his brother's failure in competition, he has a foundation to ensure that he will not be completely defeated.

As long as Anil Ambani does not fail completely, Lin Yuan will be confident that he can always restrain Mukesh Ambani.

"I want to ask, brother, why did you advise me to take over the financial business and give up the more stable energy business?" Mukesh Ambani asked.

If Lin Yuan couldn't give him a satisfactory answer, he would never change his mind.

Lin Yuan smiled and said, "Because compared to the meager income from the energy industry, we need the financial industry's ability to attract money to help you expand your business faster and compete for the market."

"Is the energy business not enough? The group's current energy business can provide a stable profit of US$10 billion per year, which is a guaranteed income regardless of drought or flood," he asked.

"Is 10 billion US dollars in profit a lot? The profit I make from making a movie is more than that. You run such a large enterprise with heavy assets, and you think the profit of 10 billion US dollars a year is good?" Lin Yuan said.

"You also know that the oil industry is subject to severe cyclical fluctuations. Once it enters a downward cycle, can your $10 billion profit help you survive the crisis? I'm afraid that without more than $50 billion in funds, you won't be able to hold on at that time." Lin Yuan continued.

When Mukesh Ambani heard Lin Yuan's words, he was stunned. He didn't expect that Lin Yuan could make so much money by making movies?
"Really? Is making movies so profitable? The profit of one movie is more than that of my entire business department combined?" Mukesh Ambani asked in disbelief.

Because Linyuan Film Company is not a listed company, it does not need to release financial reports to the public, so he does not know the profit of "The King of Spy Wars".

Lin Yuan asked, "Do you know the movie 'King of Spy Wars'?"

"I know, of course I know." Mukesh Ambani nodded.

"The global box office was nearly 24 billion U.S. dollars, and the net profit after tax reached 11 billion U.S. dollars," said Lin Yuan.

"Oh my God! This is simply a money printing machine!" exclaimed Mukesh Ambani.

"This is just the profit from one of my movies. I can make several movies a year!" Lin Yuan continued.

"..."

Mukesh Ambani feels a strong sense of powerlessness, even though he claims to be the richest man in Asia with a net worth of over 10 billion US dollars.

But this is just wealth after all, not real cash.

Lin Yuan's ability to attract money means that he earns real money that can be used immediately!
According to him, his film company's annual profit is at least over 20 billion US dollars. As long as it is successfully listed on the capital market and given a PE ratio of 10, wouldn't a large-scale movie giant with a market value of over 200 billion US dollars immediately emerge?
In this way, Lin Yuan’s wealth is no less than his own.

But this does not include his other industries. As far as Mukesh Ambani knows, Lin Yuan also owns an investment bank and two large platform companies in China.

Thinking of this, Mukesh Ambani finally began to face up to Lin Yuan's wealth.

The young man in his early 20s in front of him is already a hidden tycoon whose wealth is comparable to or even exceeds his own.

He achieved all this in just four years.

If people like this are not considered business geniuses, then who is?
Therefore, Mukesh Ambani paid more attention to the opinions given by Lin Yuan.

After all, the same words spoken by different people have completely different levels of persuasiveness.

Looking at Mukesh Ambani sitting upright, Lin Yuan knew that his PUA was successful.

He wanted Mukesh Ambani to accept his opinion, but he used a lot of psychological tactics.

The first step is to devalue the energy company he owns. To achieve this goal, Lin Yuan compares it with the profits from his own movies.

Strictly speaking, this comparison is actually very unfair.

Because Lin Yuan's movies theoretically do not provide a stable income that can guarantee a stable income, while energy companies are core sectors that are related to people's livelihood and the lifeline of the national economy.

The value of such a company cannot be simply measured by revenue.

It could be said that owning such a company means grasping the lifeline of millions of workers, making it a company that the government will protect in times of crisis. Mukesh Ambani didn't react immediately to Lin Yuan's shifting ideas, as he was completely shocked by the revenue generated by Lin Yuan's films.

But Mukesh Ambani will realize this sooner or later, so Lin Yuan came up with his second trick: intimidation.

He used the cyclical fluctuations in the oil industry to describe to Mukesh Ambani that if oil prices plummeted and the industry went into a downturn, the energy industry would not be able to put out the fire.

If more than $50 billion is needed to put out the fire, a reservoir of funds such as the financial industry must be available.

Only at critical moments can you use other people's money to save your own property.

This makes logical sense.

But the only loophole is, what if the oil price does not fall?
As a reborn person, Lin Yuan knew that in the next ten years or so, international crude oil prices would remain high. Although there would be some fluctuations, they would generally remain in a high price range.

Russia has also made a lot of money thanks to the high oil prices in recent years.

Let the Kremlin owner confidently say: "Give me 20 years, and I will give you a strong Russia."

In his previous life, Mukesh Ambani also relied on the dividends of high oil prices. He had a large amount of ammunition in his hands and used his financial advantage to defeat his younger brother.

But the problem is, don’t they know it now?
Unless you are reborn, who could have predicted that oil prices would be so strong in the next decade or so?
Such a long period of high oil prices has rarely occurred in history, so basically no one dares to think about it.

Lin Yuan knew that the reason why oil prices remained so strong for a long time was because of China's rise.

After joining the WTO, China's economy began to take off explosively, leading to a continuous surge in demand for oil.

With China as an emerging market, the demand for oil is naturally always strong, and it is no wonder that oil prices can remain high for a long time.

But all of this is unpredictable to people today.

Mukesh Ambani is indeed worried that once oil prices fall, his oil companies will suffer huge losses, while the profits of energy companies will seem to be a drop in the bucket. What will he do then?
Lin Yuan’s answer is: abandon the energy industry and embrace the financial industry.

"I understand what you mean. But we can't pay out the shares of the banks and insurance companies controlled by the group as if they were our own pockets. This won't achieve the goal," asked Mukesh Ambani.

Lin Yuan nodded, that was indeed the case.

Reliance Group's holdings in these banks and insurance companies only reach a relative control level of over 50%.

However, voting on certain major issues requires an absolute controlling stake of more than two-thirds to ensure their passage.

Increasing the shareholding ratio of these companies requires a large amount of capital.

"I calculated that a total of $10 billion in funds would be needed to achieve absolute control over these companies. My Long Island Investment Bank will provide $5 million in funds, and the Morgan Consortium will make up the remaining $5 million," said Lin Yuan.

After getting rid of Mills, the boss of MGM, Lin Yuan increased his authority over funds by $40 billion.

Of this, $30 billion is the Boston consortium's investment in Mr. Eisen's film and television funds, which is not suitable for helping Mukesh Ambani.

But the $10 billion that Long Island Investment Bank received from the Mellon Group in exchange for a 10% stake can be fully used here.

Theoretically, Lin Yuan could raise the money by himself, but he still left half for Betty.

Only by learning to share instead of eating alone can we get rid of the root cause of his death.

When Lin Yuan proposed this investment plan, Mukesh Ambani was immediately interested.

"Really? That's like timely help!"

When Lin Yuan helped him solve the funding problem, allowing him to have absolute control over these companies, it immediately seemed much better than the previous relative control.

Lin Yuan nodded and said, "Of course. We Chinese always keep our promises. I will definitely do what I say."

"What will be the price for me?" asked Mukesh Ambani.

He was not knocked unconscious by the pie that fell from the sky. There is no free lunch in this world.

Mukesh Ambani didn't believe that after Lin Yuan gave him such great help, he would not want to bite off a big piece of meat.

If the conditions are too harsh, I'm afraid he will have to reconsider the feasibility of this matter.

"Look at this, I have prepared all the conditions." At this time, Lin Yuan took out another document and handed it over.

"Expanding bank credit and prioritizing dividend planning"?
Mukesh Ambani began to carefully look through the documents in his hand. It took him a full ten minutes to finish reading the plan.

Then he turned back to the first page and read it again several times.

This... is too outrageous, right?
It’s not that Lin Yuan’s idea was outrageous, but that what Lin Yuan asked for was too little, which made Mukesh Ambani simply unbelievable and felt it was quite outrageous!
In this plan, Lin Yuan proposed a plan to expand the scale of housing credit after several banks completed absolute control.

Simply put, India is in the process of urbanization, and many farmers are leaving the countryside to work in cities.

Now that you have come to the city, you need to buy a house and settle down.

But housing prices are very high, and it takes a long time to save money to buy a house. By the time you save enough money, you will be old.

So these workers will borrow money from the bank, and the bank will get the workers' "IOU", which is a mortgage loan contract.

When banks issue a large number of mortgage loans, their own funds will become insufficient.

In Lin Yuan’s vision, these “IOUs” can be seen as long-term and continuous cash flow income (mortgage repayments by workers).

Then these "IOUs" can be packaged into a financial product, such as a bond product, and then sold.

Sell ​​to wealthy people, institutions, and big investors.

In this way, the bank will recover a large amount of funds and then have money to continue to issue more loans, right?

Then the "IOUs" received from the loans are packaged into financial products and sold, continuously rolling over.

"This idea is so genius!" exclaimed Mukesh Ambani.

How much money can you make if you play like this?

No wonder Lin Yuan is confident that he can take over the financial sector with this trick.

Although Lin Yuan paid so much, he did not ask to directly hold shares in these financial institutions, but instead asked for three years of priority dividend rights.

That is to say, within three years, 3% of the profits of these financial institutions will be allocated first to Long Island Investment Bank and Morgan Stanley.

Such conditions were simply a piece of cake, and Mukesh Ambani had to read them over and over again before he could believe them.

It’s just three years of priority dividends, and after that, won’t everything belong to me?

Besides, he didn’t take it all in these three years. Didn’t he leave 20% for me?
Mukesh Ambani immediately agreed: "No problem, I'll do as you say."

Lin Yuan smiled and replied, "Then I wish us a happy cooperation!"

The two shook hands and smiled brightly.

"Thank you so much, brother!" Mukesh Ambani exclaimed.

Lin Yuan smiled but did not answer: You don’t know that you have been sold.

Mukesh Ambani doesn't know yet that he will personally introduce this capital devil into India.

In another year or two, Wall Street also started to do this in North America, and Lin Yuan released this devil a little early.

In this credit plan, the biggest risk actually comes from the fact that the bank's collateral is the house.

Once the house price drops, the bank will have insufficient collateral, which will turn the loan into a bad loan.

However, under normal circumstances, even if the house price falls below the purchase price, the buyer has to bear the consequences himself, and the money owed to the bank cannot be reduced by a single cent.

It doesn’t mean that after your mortgage is taken away and the house is sold, you don’t have to pay back the remaining money.

How can it be that simple?
This kind of thing happened once in Hong Kong Island in 97. The drop in housing prices forced many Hong Kong Island citizens to grit their teeth and work several jobs a day to pay off their bank debts.

Earlier, this kind of thing happened in Japan.

But this time, things are different. On the one hand, the mortgage contract has been innovatively turned into a financial product, with funds rolled over many times. If something goes wrong, the impact of the collapse will be far greater than in the past.

On the other hand, under the guise of collateral, banks began to lend to "secondary" groups that do not have credit qualifications. After all, they only make money from high-quality users, and how much is that?

As a result, a large number of unqualified users will also become participants in the banking carnival.

Eventually, this storm will evolve into the "subprime credit crisis" that swept the world in 08.

But in this life, he was released early by Lin Yuan in India.

When it comes to the technique of cutting leeks, how can Third Brother compare to Lin Yuanqiang?
Betty, who had remained silent throughout the entire session, smiled as she watched Lin Yuan and Mukesh Ambani shake hands.

Three years later, when they have reaped all the fruits of this capital feast and leave, what kind of power will the huge bomb they left behind unleash?

(End of this chapter)