My Realistic Simulation Game

Chapter 229 Understanding History, Understanding Everything

Williams nodded; Qin Yuan's reason perfectly matched his imagination of a crazy gold digger.

"You've convinced me, Mr. Qin. So, how much do you hope to borrow from us at Citibank?"

Qin Yuan said decisively, "As you know, we have a $1.5 billion investment gap with the Volga plant, and I hope your bank can fill that gap."

"For this reason, I am willing to pledge all of my shares in the Far East Group as collateral."

Williams' heart began to pound.

He had no interest whatsoever in lending 1.5 billion to a car project with an uncertain future.

In his view, it is not worth betting on an industry that will be around in a few years or even ten years.

But what if the collateral is the entire Far East Group?
That's completely different.

Just by looking at the financial statements of the Far East Group that Qin Yuan presented, it is clear that just last month, the total revenue of all industries of the Far East Group reached one billion rubles.

What about that year?

Wouldn't that be over 10 billion rubles?
Moreover, the Far Eastern Group was the largest trading group in the Soviet Union at the time, spanning both China and the Soviet Union, engaging in industrial complementarity, and possessing unique characteristics.

Besides trade, there is no other business.

Not to mention, there's a huge future for the automotive industry.

As the report states, this would be beneficial if Chery's cooperation with AvtoVAZ were successful.

The future automotive market alone will be much larger than that.

In addition, there are numerous sub-businesses.

$1.5 billion is worth it.

However, his seasoned banker instincts led him to consider risk control and profit maximization.

Such a huge loan would certainly be very profitable to keep all of it for oneself.

But if you involve other industry peers, it's a completely different story.

This would both spread the risk and establish Citigroup's dominant position in the project.

However, before that, authorization from headquarters is required.

Williams took a deep breath and said:
"Mr. Qin, please wait a moment, I need to make a call to headquarters."

"Please."

Qin Yuan's expression remained unchanged, but he sneered inwardly.

He knew all too well why Williams' attitude had changed.

Like investors eyeing high interest rates, they are unaware that borrowers are truly after their principal.

This was a precise strike against greed.

Williams saw the immense value of the Far East Group.

But Qin Yuan was prepared to get something for nothing.

"However, I must remind you that for this loan, I need 1.5 billion rubles."

Qin Yuan added.

"ruble?"

Williams' hand, which was about to pick up the phone, froze in mid-air, and he turned around in astonishment.

"That's right, it's the ruble. The legal tender of the Soviet Union," Qin Yuan confirmed.

Upon hearing the word "ruble," Williams slowly put down the phone.

Citibank holds a massive amount of rubles.

Originally intended for the acquisition of high-quality Soviet assets at low prices, these were ammunition.

Qin Yuan's sudden request to borrow such a huge amount of rubles made him wary.

Then he remembered the Far East International Bank that Qin Yuan was preparing to establish.

"If it's a loan in rubles..."

Williams' eyes flashed, and he instantly changed his strategy. "I think I can make a decision directly without consulting headquarters."

He sat back down opposite Qin Yuan, his gaze intense: "However, the conditions need to be changed."

"You said."

"First of all, all financing matters for the new Volga plant project, including bond issuance and syndicated loans, must be handled by Citibank. Far Eastern International Bank can only act as a financial advisor."

Williams stated his first condition.

This is also a core condition.

He must firmly control the flow of funds and maintain dominance.

“This,” Qin Yuan pretended to frown, a look of struggle on his face.

From the very beginning, he was well aware of his own weaknesses.

That is the scarcity of financial talent.

The claim that Far Eastern International Bank would be responsible for all projects was nothing more than a pre-prepared bargaining chip. But it was all just an act.

We still have to perform the whole thing.

“Mr. Qin, Citibank has a century-long history and a global network. The resources and conveniences we can provide far exceed your expectations.”

“Sometimes, eating alone…is not a wise move,” Williams cautioned.

“In that case,” Qin Yuan said, seemingly after a difficult deliberation, finally nodding “reluctantly,” “I can relinquish control.”

"However, the equivalent of 1.5 billion US dollars in rubles must be settled at the current official Soviet exchange rate, and I will have to repay the loan a year from now."

“Deal.” Williams smiled. “Please wait a moment. I’ll contact the major banking syndicates right now. This is a huge deal that Citibank alone can’t handle.”

Williams is quite shrewd.

Citigroup could absorb the entire $1.5 billion loan.

However, $1.5 billion in rubles, at the current official exchange rate, is equivalent to 15 billion rubles, which means we'll need to call on more of our counterparts.

This is not only about sharing the risk, but also because he has already obtained the most valuable part of the deal.

That is, the control of the project.

Soon, representatives from major banks flocked to the scene after receiving the news.

UBS, Morgan Stanley, HSBC, Italian banks, and Deutsche Bank.
It really does feel like a convergence of banks from ten countries.

These banks didn't hesitate at all.

They all agreed to join this massive financing and loan deal.

One reason is that the bank in charge of the project is Citibank.

On the other hand, there is the inherent value of the Far East Group itself.

They also had a very high opinion of this Chinese company that had grown up in the Soviet Union.

Moreover, loan interest rates are not low these days.

It's as much as 15% to 20%.

They were convinced that even if the ruble depreciated, it was impossible for it to plummet by more than 20% within a year.

This deal is a sure thing!
After all, mortgage rates are usually around 5%, so this 15% to 20% rate is already three or four times the interest.

15 billion rubles, which adds up to 2 to 3 billion rubles a year.

If the exchange rate falls further, could the ruble become worthless?
With this in mind, and with the help of Citibank, a total of eighteen banks eventually participated in this loan financing.

Some lent out as little as 100 million rubles, while others lent out over a billion.

Qin Yuan coldly watched as these well-dressed bankers argued heatedly over their respective loan quotas, interest rates, and repayment details.

My heart was completely unmoved.

greedy.

People are all greedy.

Qin Yuan was greedy, so he offered a sky-high loan of 150 billion rubles.

These bankers were greedy, coveting the Far East Group's enormous size, eyeing its potential monopoly in the Sino-Soviet automobile market, and even more so, envious of the near-exorbitant interest rates.

Soviet politicians were greedy; they were greedy for money and power.

The Soviet people were greedy and believed in the bright future woven by the West.

Looted, stolen.

However, in this game called "greed," the winners are destined to be only a very small minority.

They could not have foreseen this.

The Soviet Union, this massive union, had less than a year left to live.

They wouldn't have thought of that.

The ruble-dollar exchange rate will change from the current 10:1 to 20:1.

It continued to fall.

Their imagination could never have conceived that the ruble would one day fall to 175:1.

1000: 1.

2000: 1.

They could never have imagined that the Soviet Union would collapse so quickly.

A series of irreversible coincidences will occur.

Even if, to some extent, they themselves were the instigators.

But all of this is no longer relevant to Qin Yuan.

This has nothing to do with his current acquisition of these Western banks.

Because of him, he gained insight into history!
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(End of this chapter)