industrial overlord

Chapter 468 M&A Plan
"According to the data provided to us by Hunbei City Economic Commission, as of the end of March 1994, the total assets of Hunbei Forging Press were 3 million yuan, the total liabilities were 23012 million yuan, and the net assets were 10252 million yuan. However, about half of the fixed assets of Hunbei Forging Press It belongs to old equipment and old buildings. If we want to carry out mergers and acquisitions, these old equipment and old buildings need to be renovated, and the salvage value of the equipment is almost negligible. If the technical depreciation of this part of old equipment is deducted , the net value of Hun Forging Press is about 12760 million."

This is in the small conference room of the Hunhe Hotel. He Fei, director of the strategic investment department of Hanhua Heavy Industry, introduced the basic situation of Hun Forging Press to Lin Zhenhua and others. What they are discussing now is the merger plan of Hun Forging Press.The Strategic Investment Department is a newly established department. He Fei has the experience of acquiring Nihong Heavy Industry, so he was appointed as the first director of this department.

"In the debt, does it include the debt to the employees of the enterprise?" Lin Zhenhua asked.

He Feidao: "Included, the wages in arrears, benefits and medical expenses that need to be reimbursed alone amount to more than 1000 million yuan. These are all that the Hunbei City Economic Commission hopes we will bear."

Ge Ying, assistant to the company's financial department, said: "Actually, some arrears of expenses can be completely cancelled, such as heating expenses, heatstroke prevention and cooling expenses, etc., which are not the expenses that the company must pay. These payments have been in arrears for seven or eight years. , I think if we don’t take responsibility, the workers won’t have any complaints.”

He Feidao: "About this issue, there are indeed two schools of thought. One school, like Xiao Ge's, suggests canceling it directly. The other school thinks it's better to promise to reissue it. The total amount of the money is not high. If we give Adding it will help improve workers’ sense of identity with us.”

"I agree with Assistant Ge's opinion. There are some funds that can be paid or not. Don't make up for now." Huang Gang interjected. He was assigned by He Haifeng to stay and work with Lin Zhenhua. experience, and promote it to other investors in the future.Lin Zhenhua liked Huang Gang's meticulous thinking, so he was willing to bring him to discuss issues together.

"Tell me your reason, Huang Gang." Lin Zhenhua said.

Huang Gang said: "My opinion is that for a long time, the workers of Hun Forging have formed a kind of thinking inertia and are used to eating from the big pot. We want to merge and acquire Hun Forging, mainly to introduce a competition mechanism and establish a new salary and welfare system. In this case, if we admit too much to the previous system, I am afraid it will bring a psychological implication to the workers, making them feel that we have to follow the old distribution system. In this way, we have to implement With the new system, there will be greater obstacles.”

"However, if you don't reissue the money, the obstacle will be even greater." He Fei retorted.

Huang Gang said: "I'm not saying that all arrears will not be repaid. For example, wages in arrears, medical expenses, etc., which are legally owned by the state and belong to workers, of course we have to pay. But such as heating expenses, heatstroke prevention expenses, etc. , it belongs to the part of the benefits stipulated by the company itself, so there is no need for us to reissue it. In fact, Hun Forging has been losing money for so many years, and the benefits other than the statutory ones should have been cancelled, which is in line with the principle of linking benefits and benefits. "

"What Xiao Huang said has some truth. I'd like to ask Mr. Lin to make a decision on this issue." He Fei said to Lin Zhenhua.

Lin Zhenhua thought for a while and said: "Well, let's put this issue aside for now. We don't promise to make up for those extra benefits. We only promise to make up for wages and medical expenses. Even for these money, don't make up for it all at once, but Make up part of it first, and tell the workers that the rest will be made up after the company’s operating conditions improve. In short, we must not leave an impression that we don’t care about money.”

"I understand." He Fei nodded, recorded Lin Zhenhua's opinion in his notebook, and continued: "According to the opinions discussed with the Hunbei City Economic Commission, Hunbei City agrees that we will invest 3000 million to acquire 51% of Hun Forging Press. Equity, the remaining 49% of the equity is distributed to all the employees of Hun Forging Press as compensation for their seniority. After the merger and acquisition, the wages of all retired workers of Hun Forging Press will be borne by the Social Security Bureau of Hunbei City, and the 3000 million yuan we paid will also be paid Transfer to the Social Security Administration as a pension fund."

"Oh, it was finally negotiated to be 3000 million." Lin Zhenhua subconsciously responded, but he didn't expect He Fei to answer.Regarding the method of mergers and acquisitions, he had already negotiated with Hunbei City, but the specific amount has not yet been finalized.He Fei led his work team to settle accounts and bargain with the Hunbei City Economic Commission, and finally decided on such a quota.

One of the highlights of this merger plan is to distribute state-owned equity to workers as compensation for seniority.This is an idea put forward by Huang Gang. Once it was put forward, it was fully approved by He Haifeng, Lin Zhenhua and relevant officials of Hunbei City.

The forging reform means that the original 3500 employees of state-owned enterprises collectively changed their identities and became employees of joint-stock companies.When we were in state-owned enterprises, everyone held iron rice bowls. Even if the company suffered serious losses and could not pay wages, everyone was not worried, because the company was owned by the state, and if the company owed everyone money, it was the state that owed money. It is impossible to rely on it.This is not the case for joint-stock companies. If the losses are serious and the company goes bankrupt, the jobs of the employees will be ruined. This is a serious matter.

Because of this, when many state-owned enterprises go bankrupt or restructure, they have to pay a sum of compensation to their employees. It is called "buying out the length of service". to society.According to the explanation of legal experts, buying out the length of service is equivalent to unilaterally rescinding the labor contract, which is a practice that violates the labor law.However, at that time, the labor law itself had not yet been promulgated, let alone strictly enforced, so the practice of buying out working years was very common in the reform of state-owned enterprises at that time.

This is exactly the case with Hun Forging Press. Hunbei City's sale of Hun Forging Press to Hanhua Heavy Industry is equivalent to pushing 3500 employees of state-owned enterprises out of the embrace of the country, and the necessary compensation must be given.But after a closer look, the background of buying out seniority is the compensation given by the state after the company goes bankrupt and the employees lose their jobs.Since Hanhua Heavy Industry took over Hun Forging and the employees were not unemployed, what is the basis for this compensation?

Under such circumstances, Huanggang proposed such a plan to replace compensation with equity. The specific method is to allocate this part of equity owned by the state to employees according to their working years, salary levels, and job positions. The price of buying out seniority.In the future, if employees continue to work in Hun Forging Press, they can enjoy dividends with these shares.If the employee leaves, these shares can be redeemed by the company at an agreed price, or resold by the employee in the market based on the market price of the company's stock.The agreed redemption price is equivalent to what other companies pay employees to buy out their seniority, so the employees did not suffer in the process.

"Now let's talk about our income." After Lin Zhenhua learned about the cost, he felt at ease. At a price of 3000 million, it is quite a bargain to buy such a company.The workers in the factory and the technology accumulated over the years are treasures that money cannot buy.

"The most valuable asset of Hun Forging is the 1500 mu of land in the urban area. These lands have been occupied as early as the Republic of China. The state has not paid for them, and the original value cannot be found in the company's asset account. In During the negotiation, Hunbei City agreed to calculate the price at 2 yuan per mu, and the total price was 3000 million yuan. But according to our estimates, the value of the land at this location should be around 10 yuan per mu. The value of the 1500 mu of land , should be more than 15000 million yuan, and based on this alone, our merger and acquisition has already made a solid profit." He Fei said with a smile.As a minister of the strategic investment department, he felt a sense of accomplishment for being able to take such a big advantage in the negotiation.

At that time, the real estate industry in northern cities had just started, and there were only a dozen commercial properties in Hunbei City, and the price of commercial housing was less than 400 yuan per square meter.Neither the government nor the developers realized the value of the land. In addition, the land in the factory area that had been forged and pressed had never been paid for, so the city government had no idea how much the land could be worth.

However, in the south, the real estate boom has already appeared at this time. The real estate prices in Hainan and Guangxi Beihai have been skyrocketed, and countless speculators have become rich overnight, attracting countless funds to flow to these regions.

Lin Zhenhua said: "The accounts cannot be calculated in this way. We are buying a factory, not real estate. After all, this 1500 mu of land is our factory area. No matter how valuable it is on the books, we can't sell it, so the money is just a theoretical gain. That's all."

He Fei glanced at Huang Gang, motioning for him to speak.Huang Gang said: "Mr. Lin, Minister He and I have carefully inspected the factory area of ​​Hun Forging Press, and feel that 200 mu of land in the southwest corner of it can be vacated for real estate development, even if it is to build ordinary houses. According to the current market We can earn more than 5000 million yuan if we sell it at the price, which is enough to compensate for our investment.”

Lin Zhenhua pretended to be serious and asked, "Huang Gang, did He Fei tell you that I firmly oppose the company's involvement in the real estate industry?"

Huang Gang nodded and said: "Minister He told me that I don't think you need to be too paranoid about everything. Being obsessed with real estate is two different concepts from making use of real estate. At the right time, do some real estate development projects and withdraw funds , is also a means of business management. As long as Mr. Lin doesn't focus on real estate, it doesn't matter."

"Hehe, good you Huang Gang, dare you say I'm paranoid! Do you think you have no leader?" Lin Zhenhua scolded with a smile.

Huang Gang also said with a smile: "Mr. Lin, this is the style you advocate. Everyone is equal and speak freely. When you talk to my mentor, you seem to be so outspoken, right?"

Lin Zhenhua said to everyone: "I knew that Huang Gang was taking revenge on me for Director He."

He Fei smiled and said: "Mr. Lin, I agree with Xiao Huang's opinion. We can't focus on real estate and be tempted by the high profits of real estate, but how many houses are built under our noses? Not too big, right? It’s just to facilitate the return of funds.”

"No, absolutely not now." Lin Zhenhua said seriously.

"Why?" Huang Gang and He Fei asked together. In their impression, Lin Zhenhua was not a very paranoid person.

Lin Zhenhua said: "Think about it, how much is the housing price in Hunbei now? More than 300 square meters, it is still a good location. After 20 years, no, as long as 15 years, I can guarantee that Hun forging will cost 1 yuan for that lot It’s more than one square meter. If we sell the house after building it now, wouldn’t we regret it to death by then?”

Huang Gang said in amazement: "Uh...Mr. Lin, why do I think you are more greedy than me?"

Everyone laughed, Lin Zhenhua turned to Feng Kuang from the machine tool company, and asked him: "Old Feng, do you have any ideas about researching the product line of forging and pressing these days? To develop new products, how much investment is required? How much profit there is, and whether our business is worthwhile, ultimately depends on this.”

Feng Kuang is also a returnee, a CNC machine tool expert recruited by the machine tool company a few years ago, and this time he is specially responsible for evaluating muddy forging from a technical point of view.Hearing Lin Zhenhua call his name, he adjusted his glasses and said: "I have already studied it. The product line of mud forging is seriously aging. Most of the products are the technology transferred from the Soviet Union in the 50s. The so-called new products are also It is just a little improvement on the basis of the old model, and the numerical control technology is completely blank, so such a product is definitely uncompetitive in the market.”

"We all know this, what do you think?" Lin Zhenhua asked.

Feng Kuang said embarrassingly: "Mr. Lin, you also know that I used to be engaged in CNC machining centers. I don't know much about forging machinery. I checked some information suddenly these days, and I think that if we want to replace imported There should still be some markets for high-end CNC forging equipment, but the profit margin is very low. The price of pressure machinery manufactured by some coastal township enterprises is very low, and the profit margin has been compressed to a very small extent.

I asked Mr. Hu from the headquarters to help me calculate that if we invest about 3000 million yuan in equipment transformation and technology development according to the current product series, we will occupy about 20% of the domestic market in the future, that is, we can reach a breakeven. "

Mr. Hu that Feng Kuang mentioned was Hu Wei, the head of the planning and operation department of the group headquarters. He was relatively expert in making such calculations.This time, he didn't come to Hunbei, but with the help of the information faxed to him by the seal, he was able to roughly make a more reliable calculation of the profit and loss of several plans.

"What's the use of profit and loss balance?" Lin Zhenhua said depressedly, "For such a large company, the daily operating expenses are not a small figure. If we only pursue profit and loss balance, the final result may be a net loss. We After all, it is for investment, not for charity, and it is absolutely impossible to do things that do not make money."

"If this is the case, we need to consider developing new products. However, I don't have any good ideas at the moment." Feng Kuang said apologetically.

(End of this chapter)