50s: Starting with a storage ring

Chapter 406 Gold for Shares

Chen Damin forced himself to calm down, walked back to the sofa and sat down, then picked up his teacup and took a big gulp to relieve his dry throat.

Then, he asked hesitantly, "Mr. James, what do you want?"

His thinking is now very clear: these $2000 million worth of gold are not so easy to obtain, and Cathay Bank will inevitably have to pay a sufficient price for them.

But he knew even better what 8 ounces of gold meant. Gold reserves are a bank's foundation and a guarantee of its credibility.

If you put all that glittering gold in front of your customers, they won't need to say anything more; big clients will naturally be willing to deposit their money in their bank.

However, taking out the equivalent of $2000 million would not have the same effect.

Cathay Bank has not yet started accumulating gold reserves because the bank's working capital is needed to reserve funds for its soon-to-be-opened branches.

Currently, the only gold in the bank is held by customers, and the total amount is less than 1000 ounces.

He now desperately wanted to know whether they could afford the price that Mr. James was about to demand.

Sun Zhiwei did not directly propose to invest, but first introduced himself.

"Three years ago, I was just an ordinary person with no money, no house, and no savings."

"Three years later, I owned two small islands, a farm, an iron mine, and two gold mines."

"My biggest problem now is that I don't know where to put my gold safely after I've dug it up."

"As someone in the industry, I think you know very well what kind of people those big banks are. With my current capital, I'm just a piece of fish in their eyes."

"As the gold mines produced more and more gold, I knew I couldn't just keep it all at home; that would be suicide. There are too many desperate people in America."

"By chance, I heard about Cathay Bank, which was the first Chinese-owned bank I had ever heard of."

“I think most of the shareholders who founded this bank shared the same idea as me: it is not safe to deposit money in foreign banks.”

“I heard that Cathay Pacific recently wanted to expand into other cities, and now is a good opportunity.”

"China and the United States have just established diplomatic relations and are about to usher in a huge wave of trade. If Cathay Pacific can get a share of this, the benefits are self-evident."

He paused here, took a few sips of tea, and let Chen Damin process what he had just said.

Then he stared into Chen Damin's eyes and said, "I hope to deposit the money in my own bank. I wonder if there is such an opportunity."

Chen Damin wasn't surprised to hear that Sun Zhiwei wanted to invest in Cathay Bank. He couldn't think of any other price Cathay Bank could pay to acquire so much gold, except perhaps selling itself.

However, he can't agree to take on shares on his own; a board meeting is required, and the majority of shareholders must agree.

In fact, as the president who controlled the entire bank and one of the shareholders, he had the trust of all the shareholders and was confident that he could persuade the other shareholders to agree to Sun Zhiwei's request to invest.

However, the sale of these shares requires an agreement between the two parties. For other shareholders to relinquish their shares, Mr. James will have to pay a sufficient price.

"How many shares would you like to receive?"

"How about this: you inform all the shareholders of my idea, and then we'll hold a shareholders' meeting where we can negotiate in person? How about that?"

Chen Damin thought for a moment and said, "That shouldn't be a problem. I'll go and inform the shareholders to come over now."

Sun Zhiwei gestured for him to make himself at home, then sat down and drank his tea in peace. Cathay Pacific only had a handful of shareholders, and they were all Chinese from Los Angeles, mostly living in Chinatown not far away, just a few hundred meters from the bank.

Chen Damin went to the next room to make phone calls, informing each shareholder one by one and explaining what had happened that day.

Ten minutes later, the first shareholder, excluding Chen Damin, arrived at the bank, and within the next ten minutes, all eight shareholders had arrived.

They didn't go to any proper conference room, but instead all gathered in the VIP room downstairs to see what the 8 ounces of gold that had moved Chen Damin looked like.

As a result, one after another fell, and the impact of a large amount of gold was unparalleled.

Several of the eight shareholders present were worth tens of millions of dollars, but none of them had ever seen what gold worth tens of millions of dollars looked like.

Once everyone had arrived, Sun Zhiwei signaled to the two bodyguards inside to stand guard at the door, as he needed to speak with a few shareholders privately.

Chen Damin had obviously spoken with the shareholders individually just now, and he was still in charge of chairing the meeting.

“Mr. James, I don’t know at what price you are planning to acquire Cathay’s shares. If we only consider the valuation, I don’t think anyone would be willing to do so.”

"Because Cathay is currently in good financial condition and is on a clear upward trend, everyone knows that Cathay will be more valuable in the future. Therefore, the current valuation of Cathay will not satisfy the shareholders."

"Moreover, you can only acquire a maximum of 30% of the shares."

Chen Damin was interrupted by Sun Zhiwei's gesture just as he was getting to this point.

Then Sun Zhiwei spoke up: "Before we discuss the price, let me first tell you what I can bring to Guotai?"

"First, I will use gold to pay for the acquisition of these shares."

This statement immediately sparked discussion among the shareholders, as everyone knew that gold was appreciating in value.

For them, Sun Zhiwei's willingness to pay in gold was definitely more cost-effective than paying in US dollars.

"Secondly, as long as there is a Cathay Bank in San Francisco, all the gold mined from my two gold mines each month will be deposited into Cathay Bank."

This means that Cathay Bank's gold reserves will increase, and the more gold it has, the more beneficial it will be for Cathay, and the more valuable its shares will become. They understand this simple value.

"Third, if necessary, I can deposit a fixed amount of gold with Guotai and guarantee that it will not be withdrawn."

At this point, Chen Damin could no longer hold back. He immediately asked, "Mr. James, do you mean that once this batch of gold is deposited, you guarantee that you won't take it away again?"

“That’s right. As long as I remain a shareholder of Cathay, this fixed amount of gold will remain in Cathay’s vault and will serve as Cathay’s gold reserves.”

"Of course, I still own the gold."

"Of course," Chen Damin quickly promised. "So, how much gold can you deposit?"

"It depends on what kind of agreement we can reach."

Upon hearing this, Chen Damin immediately began discussing the matter with the shareholders.

There's really nothing to discuss. This gold-for-shares deal is bound to happen; the only question is how much premium Sun Zhiwei is prepared to pay.

(End of this chapter)