Started from Hong Kong Island

Chapter 284: 282 [Fighting to Support War]

"Luckin Coffee has just emerged from the crisis and it wants to acquire other companies. Aren't you afraid of taking too big a step and running out of funds?" Li Wendi smiled faintly, staring at Zhang Yan.

It is normal for Zhang Yan to have the idea of ​​acquisition. Many Chinese companies see that large British companies are expanding, so they want to follow suit, otherwise they might miss a good opportunity. However, the number of high-quality companies is limited, so it can be said that the first to strike will gain the upper hand, and the last to strike will suffer.

Especially after the news that Li Wendi defeated the British company Hutchison Whampoa and successfully acquired Wharf Holdings, Chinese businessmen had a general idea that "if Li Wendi can do it, so can I". Therefore, Hong Kong has entered a very impetuous period. Companies and businessmen with a little bit of strength all want to launch acquisitions to enhance the competitiveness of their companies and their own status.

With the support of Li Wendi, Zhang Yan is even more eager to make a move. He believes from the bottom of his heart that Luckin Coffee should take the opportunity to be promoted to a medium-sized real estate company, and even have the same status as China Entertainment Properties.

"Small funds have their own acquisitions. Now is the era of acquisitions. I can't fall behind." Zhang Yan said with a twinkling look, "Besides, you are also a shareholder of Luckin Real Estate."

The latter sentence was said quietly, but Li Wendi heard it clearly and said with a smile, "I personally still owe the bank 200 million yuan, and now I don't know how to pay it back. You are still thinking about my help, which is a bit vague."

Zhang Yan suddenly became serious. "Luckin Coffee is not a particularly high-quality company, but its asset value is not bad, and its debt ratio is only over 4%. It is fully capable of acquiring a smaller company. If we don't start the acquisition now, I don't know when Luckin Coffee will wait."

Li Wendi found that Zhang Yan had become much more mature since he was charged by the ICAC. It was heard that this guy rarely went to Sai Wan nightclubs and stayed in the company all day. He seemed to be studying something and it seemed that he had read a lot of books today.

"Since you have made up your mind, which company is your target? I can give you some advice, but you still need to raise the funds yourself. I spent nearly 3 million to acquire Wharf Group, and I really don't have much cash." Li Wendi reminded Zhang Yan, not wanting Zhang Yan to have the illusion that someone would help him when he encountered big difficulties.

Li Wendi didn't want to stop Zhang Yan, because if he always prevented others from getting rich, even brothers would become enemies. Moreover, acquisitions were beginning to become a common trend in Hong Kong's business community, and he couldn't stop it many times.

"This is the company's information. Take a look first." Zhang Yan seemed to have guessed what Li Wendi would say in advance. There was no abnormality on his face. He directly handed the prepared documents to Li Wendi.

CHENG YI ENTERPRISE LIMITED!

This is the name written on the document. Li Wendi doesn’t have much impression of this company. It should be a small company.

Cheng Yi Enterprise Company was founded in 63 and did not go public during the bull market. Its founder maintained a very prudent style, so it avoided the crises in the 60s. However, when the second-generation heirs took over, they changed their prudent style and acquired properties and land on a large scale during the peak period in 72 and 73. Now it is in a dilemma of capital turnover.

Starting in 74, the founder came out again to clean up the mess, but it was too late to reverse the situation. The experienced founder wanted to hold on until the market improved, but now he can't hold on any longer. However, the founder knew very well that selling assets to recover funds seemed to be the only way to save the situation, but he was exhausted and old, and his heirs were unreliable, so he wanted to sell the company's shares and use the money to guarantee his life in his later years.

Keeping the original assets allows the founder to sell his shares at a good price. Once the assets are reduced, the company will be worthless.

This company owns a lot of good things, such as a 12-storey commercial building in the urban area of ​​Kowloon (the location is not very good), 8 high-quality shops in the urban area, and 3 industrial buildings in the Kwun Tong Industrial Area. According to the current situation, the annual rental income is as high as 420 million yuan.

The assets are not bad, but the debts are serious, exceeding 1800 million yuan, which is a huge burden for Luckin Coffee. Of course, as long as the market can recover to the peak in 73, everything will be over. However, the peak in 73 was not recovered so quickly.

“How much spare funds does Luckin Coffee have now?” Li Wendi asked, putting down the documents.

"About 600 million!" Zhang Yan said truthfully.

One third! At most, it can settle one third of the debt, and it does not include the funds needed to take away the shares held by the founders.

"How do you plan to raise funds? The major shareholder of Chengyi Enterprise wants a transfer fee of 1000 million." Li Wendi asked expressionlessly.

Zhang Yan hesitated for a moment and said, "As for bank loans, Luckin Real Estate has some high-quality properties that can be mortgaged, as well as shares of Chengyi Enterprise Company."

This is a risky move that could lead to the liquidation of both companies.

Li Wendi advised, "If an accident happens, Luckin Coffee will be in trouble."

"I know that people working in real estate are taking risks. Without taking risks, there will be no development opportunities." Zhang Yan said firmly.

Li Wendi was slightly stunned, as if he had said something similar before, so he stopped persuading her and said, "What about Chengyi Enterprise's debt? 1800 million can crush the major shareholder, and it can also crush Luckin Real Estate."

"The real estate market today is not as depressed as it was in 74. After I take over Chengyi Enterprise Company, I will take the initiative to sell some poor properties and land to pay off part of the debt." Zhang Yan's handling method is quite conventional, but now that the real estate market is recovering, this trick can be used to pay off these debts.

However, Luckin Real Estate will not make any big moves in the future because it is hampered by the debts from these acquisitions. Li Wendi wanted to help, but now he can hardly come up with a few million, and his company is not very wealthy, so he reminded Zhang Yan not to think that he would help.

"I suggest that you sell all the fragmented properties, except for those shops with good locations." Li Wendi glanced at Zhang Yan and continued, "Fragmented properties will increase the management costs of the company, and the interest on the 1800 million loan is very high. This can quickly improve the competitiveness of Chengyi Enterprise. Maybe after losing weight, you can continue to play acquisitions."

Zhang Yan's eyes lit up, this seemed like a good idea.

In fact, the method Li Wendi mentioned is somewhat based on the model of "fighting to support war". In this way, limited funds can be used for the maximum expansion. The risk is naturally not low, and bankruptcy liquidation is the lightest bad consequence.

Li Wendi told Zhang Yan the hidden dangers again, and the choice was entirely up to Zhang Yan himself.

"The economy is getting better and better. I don't think the risk is that great. Once successful, Luckin Coffee will be a solid medium-sized real estate company." Zhang Yan couldn't resist the temptation.

In the next few days, Zhang Yan made preparations and still asked Li Wendi to help in person. After all, Zhang Yan's negotiation ability was still not very good, and he was worried that he would not be able to lower the price.

Li Wendi had no choice but to agree that this was the last time and he would not show up again next time.

The actual controller of Chengyi Enterprise Company is a 63-year-old man. His eyes are a little cloudy, but he is in good spirits. After being reminded by his secretary and knowing Li Wendi's background, his attitude became very enthusiastic.

At first, the old man refused to lower the price, and even said that Chengyi Enterprise Company had no shortage of buyers. In fact, Chengyi Enterprise Company was not a high-quality company, and few real estate developers were interested in it.

Li Wendi explained the situation of Chengyi Enterprise Company with a smile, which made the old man's face turn red and black.

Finally, under the strong pressure from Li Wendi, the old man agreed to sell 860% of the shares of Chengyi Enterprise Company for 42 million yuan, and the 860 million yuan would be paid in three installments within no more than 3 months.

After taking over Chengyi Enterprise Company, Zhang Yan could not wait to join the board of directors, wanting to restructure the company's debts as quickly as possible to facilitate his next plan.

However, many shareholders objected because the local market would recover and as long as they waited for a period of time, Chengyi Enterprise Company would automatically be revitalized and there would be no need to sell the company's properties to repay debts.

Zhang Yan fully informed the shareholders of the company's financial situation, saying that if the debts were not cleared, the company would be in danger of bankruptcy.

The poor financial situation made shareholders uneasy, and some shareholders changed their tone and began to support Zhang Yan in selling some less-good properties and clearing some of the debts.

Although Chengyi Enterprise lost a lot of money from the sale of properties, it also cleared a quarter of its debts and reduced its pressure sharply.

Of course, in this situation, it is not suitable to launch an acquisition yet. More funds need to be raised and Chengyi Enterprise still needs to slim down. So Li Wendi ordered his Capital Real Estate to conduct some high-quality property transactions with Chengyi Enterprise and make some profits by the way.

Li Wendi was not in a hurry to take over Wharf Holdings. Instead, he hired securities companies and financial auditing companies on the market to audit the accounts of Wharf Holdings. Once any problems were found, he would immediately report them to the Independent Commission Against Corruption and relevant departments.

At the same time, Li Wendi sent capable personnel from his companies into Wharf Holdings to control the financial department of Wharf Holdings. As for core departments such as administration, they were very complicated, so he needed to clean them up slowly.

However, Li Wendi has never been tolerant of those foreign managers who are not cooperative at all, and he directly fires them. As for positions, Li Wendi usually lets his subordinates with good performance take over.

Li Wendi will only appear on the board of directors of Hutchison Whampoa Company after some major issues have been dealt with.

Li Wendi did not have the energy to pay attention to the subsidiaries under Wharf Holdings for the time being. He now understood why Shen Bi said that (he could not manage Hutchison Whampoa). The talent echelon is really too important.

Nowadays, even if we poach all the talents from the companies under Cheung Kong Properties, we can barely get the entire Wharf Group running. So Li Wendi plans to focus on the big and let go of the small, and deal with the Wharf Group first before dealing with other things.

After getting to know some core information of Wharf Holdings, Li Wendi was impressed by the huge scale of Wharf Holdings. It controls dozens of companies, 27 of which are well-known, such as tram companies, tunnel companies, and container companies. The quality of its industries is exciting.

No wonder the charter king was determined to take over Wharf Holdings at all costs!
Li Wendi even had an idea: even if he had to destroy Changxin Real Estate Company and its subsidiaries, he had to stabilize the Wharf Group, and the Wharf Group would become a powerful support to him in the future.

(End of this chapter)