Rebirth of England.

Chapter 584 British Energy Group
By the end of January, Merrill Lynch was once again seeking capital injection.

According to an announcement issued by Merrill Lynch Group, in order to alleviate the "anemia" caused by writing down huge losses related to subprime debt, they are preparing to issue US$66 billion worth of preferred shares to a group of investors, including South Korea. Investment Company (KIC), Kuwait Investment Authority and Mizuho Industrial Bank, a subsidiary of Mizuho Financial Group, are three powerful Asian investors.

Prior to this, Merrill Lynch Group had announced that it had written off US$84 billion in losses related to its mortgage business in the third quarter, and the outside world is expected to write down losses of a similar size in the fourth quarter.

At the end of last year, Caesars Fund, a subsidiary of DS Group, injected US$50 billion into Merrill Lynch Group and acquired 9.9% of their shares.

In addition, plus the US$12 billion capital injection from Davis Select Consultants, Merrill Lynch Group received a total capital injection of US$62 billion at that time - in addition, they also invested US$12 billion in British Automotive The group sold off most of their commercial finance business.

And just one month later, Merrill Lynch Group needed another US$1 billion in funds. It can also be seen how serious the losses they suffered in the subprime mortgage crisis were.

According to the Wall Street Journal, Merrill Lynch's new chairman and CEO John Thain said that one of his main tasks in the past few weeks has been to protect Merrill Lynch's strong financial position, and this transaction will ensure that Merrill Lynch has sufficient Capital.

Merrill Lynch's shares will be sold mainly to South Korea Investment Company, Kuwait Investment Authority and Mizuho Industrial Bank, a subsidiary of Mizuho Financial Group - the first two are government-controlled investment funds.

The shares were issued at $52.40 per share, equivalent to the average closing price of Merrill Lynch's shares in the three days before last Friday, and the dividend is 9% per year.

A month ago, when Caesars Fund invested in Merrill Lynch Group, the corresponding issuance price of Merrill Lynch Group's new shares was still US$48. Now it has risen to US$52.4, which does not make them too "taken advantage of"...

It is worth mentioning that among the large banks in Japan, Mizuho suffered the most losses in the previous subprime mortgage crisis.

Even so, the company's losses from investing in high-risk mortgage-backed securities in the six months to the end of September last year were only $9 million, which is much less than some Western banks that have lost billions of dollars - but Mizuho It also said losses were likely to increase.

Mizuho Industrial Bank, a subsidiary of Mizuho Financial Group, is the second-largest commercial bank in Japan by market capitalization, second only to Mitsubishi Tokyo UFJ Financial Group.

Well, they are also on the short-selling list of Tianhe Capital's IE Fund and Rich23 Fund...

In addition, South Korea established KIC (South Korea Investment Corporation) in mid-2005, aiming to use part of South Korea's central bank's excess reserve funds for some more proactive investment projects that the central bank cannot get involved in according to regulations.

As of the end of 2007, the company had $200 billion in assets under management, of which $148 billion had been invested.

Two months ago, the South Korean government allowed KIC to invest in emerging markets and announced that it would allocate US$2008 billion from an exchange stabilization fund to the agency for management in early 100.

As for the Kuwait Investment Authority, it is Barron's "old friend". Among the many investment funds controlled by the governments of Middle Eastern countries, KIA (Kuwait Investment Authority) is the oldest and most experienced one. They manage assets of more than 2000 billion. Meanwhile, KIA has invested in Western companies for decades, but before that it adjusted its investment strategy and began to dabble in other investments and private equity transactions.

This also includes investments in various funds under the DS Group.

……

In early February, Barron and his team returned to London, and a personal assistant, Zhang Junning, was added to the entourage. It must be said that returning from warm Australia to winter in London did require some adaptation. On the way home, they could still see the scene of snow, as if they had traveled from summer to winter.

As soon as Barron returned to London, he met with Brown.

"The sale of British Energy requires comprehensive consideration of more aspects, Your Highness. After all, EDF and Centrica each have their own advantages..."

After hearing the words of the Prime Minister in front of him, Barron did not react much, but said calmly:
"We already hold 8% of the shares of British Energy Group and are considered one of the major shareholders of this company. After the acquisition by United Energy Group, we will be able to promote the use of clean energy and will close coal-fired power plants and increase natural gas power plants. number, Your Excellency Prime Minister, I need your support in this regard, and I do not think it is a good idea to hand over all our nuclear power plants to the French.”

Yes, the main purpose of his return this time is to help United Energy Group win the bid for British Energy Group, thereby increasing the power generation business for United Energy Group.

British Energy Group is the largest nuclear power company in the UK. It currently has 8 nuclear power plants and 1 thermal power station. The British government holds 35% of the shares of British Energy Company and is the largest shareholder of this company. Therefore, for this time United Energy The government's intention in the group's acquisition of British Energy Group is still very important.

Prior to this, the British government set the deadline for selling British Energy Group shares at the end of May. Therefore, before then, United Energy Group needs to try its best to obtain government support.

At this time, United Energy Group has purchased 8% of the shares of British Energy Group from INVESCO-PERPETUAL, the major shareholder of British Energy Group.

Their main competitors for this acquisition include EDF and Centric Group.

Among them, EDF has the highest enthusiasm. Currently, the world's most advanced third-generation nuclear power technologies include the AP1000 of the American Westinghouse Consortium and the ERP technology of France's Areva. Competition between these two technical routes Rather intense.

What EDF Group owns is Areva ERP technology. Taking over British Energy Group will enable them to gain a larger market for their Areva ERP technology.

The French government currently holds more than 80% of the shares of EDF Group - they hope to use these power stations owned by the British Energy Group as their bridgehead, so that they can build 4 power stations in the UK by using the technology of the French AREVA Group. New nuclear power plant.

For the British side, not only can selling their holdings in British Energy Group bring billions of pounds in income, but the energy shortage in Britain is becoming more and more obvious, and they also hope to alleviate it by building new nuclear power plants.

"We don't have to use French technology. Your Excellency Prime Minister, I can also cooperate with the Westinghouse consortium to build a third-generation nuclear power plant with the best technology in the UK."

Behind the Westinghouse Consortium is the capital of the United States. Of course, Barron does not really want to cooperate with the other party. In this way, it is just a means.

EDF Group had a considerable share of the British power grid business before this - they already occupy more than 30% of the British power network. This is also an area that United Energy Group hopes to enter.

It is worth mentioning that the State Grid business that Li Chaoren will purchase in England in the future will be purchased from EDF.

(End of this chapter)