Started from Hong Kong Island

Chapter 372 370 [Wait and See]

Most of the power generation materials needed by the Hong Kong Electric Company's power plant are imported, so the electricity bill in Hong Kong will be slightly higher than that of similar cities.

To transport the materials to Hong Kong, shipping vessels were naturally needed. It happened that the transportation contracts were about to expire, so Li Wendi asked the electric light company to cooperate with the shipping company under the Wheelock Company, and at the same time he could also give the electric light company some discounts.

Even though the cost of generating electricity was high, it did not affect the profitability of the Hong Kong Electric Company. In 78, the company's full-year profit exceeded the 2.5 million yuan threshold, making it one of the leading companies in Hong Kong.

Therefore, Li Wendi decided to take out 1.8 million yuan for dividends, and the New Kowloon Investment Company, which held 38.4% of the shares of the Hong Kong Electric Company, could receive 6900 million yuan, of which Li Wendi personally could get 5500 million yuan.

According to Li Wendi's plan, the shareholding of Hong Kong Electric Company must reach 49% in order to exercise full control over the company, but all this requires solving the current debt problem.

Changxin Group
Bai Hui reported that the Hang Seng Index fell from 568 points to 504 points due to the situation in the Middle East. Fortunately, the impact was not great.

There is also good news. The price of gold has risen to US$340 per ounce, and the group has made a profit of more than 1 million Hong Kong dollars from leverage, which is much greater than the profit in the stock market.

According to my memory from my previous life, the price of gold would reach US$79 per ounce by the end of 800. That would be the time for real acquisitions, and Changxin Group alone would be able to make a profit of 6 to 7 million yuan.

However, we also have to find ways to solve some debt problems. Li Wendi’s current personal debt is as high as 15 billion yuan, and the monthly interest is as high as 1500 million yuan, which is really stressful.

Today, the market value of Changxin Group has reached 70.8 billion yuan, which is not much different from the market value of 83 billion yuan of Swire Properties. However, Changxin Group still has a debt of 30 billion yuan, and the debt ratio exceeds 4%. It seems not heavy, but in fact, the interest has eaten up a lot of profits.

The Hang Seng Index fluctuates, making it difficult for Li Wendi to seize opportunities, and the current rise in the Hang Seng Index is not optimistic.

"The group's recent situation is pretty good. After discussing with the securities company, we will prepare a new round of share offering and use the funds raised to repay some debts. Don't touch the interest-free loan from HSBC for now." Li Wendi could only develop the Changxin Group at the expense of his own personal interests.

"According to the rules, should we provide 10 share for every 1 shares?" Bai Hui asked.

"5 shares for 1 share! We need to hurry up on this matter, as the interest the group needs to repay every month is too high." Li Wendi continued to instruct.

Although Changxin Group has the ability to repay the debt, the annual interest of 2 million yuan is really exaggerated. You should know that in the same period of the previous life, the annual net profit of Hang Lung Company was only 2.8 million yuan.

Next, Li Wendi should consider how to raise funds for the rights issue. As a major shareholder holding 60% of the shares of Changxin Group, he needs to bear 6% of the funds.

After Bai Hui left, Zhang Wentao came in.

"Boss, this is a report on some scattered industrial building properties held by the group. We have recovered 1.3 million yuan in funds. In addition, all the Chuk Yuen South Estate in Wong Tai Sin District has been sold out, recovering 1.7 million yuan in funds, of which the profit is 5328 million yuan." Zhang Wentao reported on the sale of a series of sites and the funds recovered.

Li Wendi glanced through the report and said, "The 4.1 million yuan of funds raised can be used to repay the group's debts. The debt ratio can be reduced to 36%."

"Boss, the real estate market is booming right now. Why don't we put our money into land development to make more profit," Zhang Wentao suggested.

"Repay it first. The interest for one year has swallowed up more than 1 million yuan in profits, which is equivalent to the profits of two large real estate projects. What are the prices of small commercial buildings in Central now?" asked Li Wendi.

"It has reached 710 yuan per square foot. The market value of Kanghe Building and Gongbei Building held by the group has exceeded 6000 million yuan, and the value of Gongbei Building is close to 8000 million yuan." Zhang Wentao reported. He probably guessed what the boss meant, which was to sell these high-quality buildings to recover funds and repay debts.

Li Wendi sighed and said, "Forget it, let's just keep it and continue to appreciate in value."

Even if it sells all of its small commercial buildings in Central, it may not be able to make up a quarter of its debts, and now is not the best time to sell prime properties.

According to Li Wendi's judgment, 81 would be the peak year for the real estate market. He could make a profit by selling the properties at that time, and then buy them back when the real estate market plummeted in 83. The profit difference would be really huge.

Inside the private room of The Peninsula Hotel in Tsim Sha Tsui

Li Wendi and Li Jiacheng met here. Li Jiacheng now controls the board of directors of Hutchison Whampoa. It is only a matter of time before he controls its body. Li Jiacheng is different from Li Wendi in that he is good at "boiling a frog in warm water" and believes in a set of Confucian principles. He will not quickly cut off control of Hutchison Whampoa, but will adopt a strategy of gradual erosion.

Although Li Jiacheng's way of doing things is slow, it causes the least loss to the company. It can greatly retain talent and leave a good reputation for himself.

Li Wendi prefers the Huang-Lao hegemonic method used in the early Western Han Dynasty, which is good at making a one-size-fits-all approach, then suturing the wound, slowly recuperating, and then eliminating the remaining poison.

"Mr. Li is really financially strong. Not long after acquiring Wheelock and Company, he competed with Hutchison Whampoa for the Electric Light Company and defeated Hutchison Whampoa again." Li Jiacheng complimented. He was somewhat envious of Li Wendi's drive and strong source of funds.

"Mr. Li, you're too kind! Including the initial investment, the acquisition cost a total of 21 billion yuan of my personal funds. I still owe the bank 15 billion yuan and need to repay 1500 million yuan in interest every month." Li Wendi sighed.

The two chatted for nearly half an hour before slowly getting to the point.

"Mr. Li wanted to acquire China Bus Company, but why did he give up halfway?" Li Jiacheng asked seriously.

"What could be the reason? Of course it's the lack of funds." Li Wendi said with a smile, "Why? Mr. Li, are you interested in China-Pakistan Company? To be honest, Yan Chengkun has become more cautious after that incident. The Yan family holds 40% of China-Pakistan's shares, so it will be difficult to successfully acquire it."

Li Jiacheng claims to be a humble gentleman, but in fact he is fundamentally different from people like Cheng Yutong and Pao Yue-kong. It is not an exaggeration to say that he is a hypocrite, who often says one thing and does another behind the scenes.

Today, large British companies such as Wheelock and Company, Wharf Holdings and Hong Kong Electric Company, which own large amounts of cheap land in Hong Kong Island and Kowloon, have all been acquired by Li Wendi, leaving only high-quality companies such as China Motor Bus Company.

"Mr. Li, I heard that Yan Chengkun has reduced his shareholding to 31%. The Yan family cashed out 9% of China-Pakistan's shares through a securities company, and all the funds were used in some small-scale land development projects of China-Pakistan." Li Jiacheng smiled and said, "Mr. Li is a director of China-Pakistan, so you should know something about it, right?"

Li Wendi really didn't know. He was busy with acquisitions recently and ignored the Yan family of China Motor Bus. He also obtained the development rights of a large tract of land in the New Territories from Kowloon Motor Bus Company, so naturally he paid less attention to China Motor Bus.

"What does Mr. Li mean?"

"If Cheung Kong Holdings and the Cheung Kong New Group launch an attack on China-Pakistan Corporation, the Yan family will definitely not be able to resist," said Li Jiacheng.

Li Wendi frowned and said, "Mr. Li should know the agreement that Changxin Group and I personally signed with China-Pakistan Company and the Yan family a few years ago. I can only support the Yan family in running China-Pakistan Company."

"I know! When signing the contract, Mr. Li only held 9.5% of China-Pakistan shares. Shares exceeding this amount probably do not fall into this category." Li Jiacheng persuaded Li Wendi, meaning that Li Wendi only needed to lose some reputation to gain a lot of benefits.

Li Wendi was still reluctant. Although China Bus Company owned a large amount of land in Hong Kong Island, Li Wendi also had interests in it. It was just that the Yan family was a bit greedy. The small plots of land were taken away by them in various ways, and the large tracts of land were still developed cooperatively.

Li Jiacheng thought for a moment and said, "If Mr. Li is willing to not help each other, Cheung Kong Holdings is willing to transfer 3% of the land of China Bus Company to Cheung Kong New Group after the acquisition is successful."

"Mr. Li's conditions are very generous, but it will only be a verbal agreement, and the 5.5% shares I hold are in support of Yan Chengkun." Li Wendi said with a faint smile. He understood that Li Jiacheng was worried that he would join forces with the Yan family to launch a counter-takeover, and the possibility of Li Jiacheng acquiring China Bus Company would be very slim.

"Of course!" Li Jiacheng knew that Li Wendi was moved.

“However, in order to repay Mr. Li, I can introduce him to some small shareholders of China Bus Company. As for whether he can win them over, it depends on his ability.” Li Wendi said.

"Okay! Mr. Li, just wait and see. We will definitely succeed."

Clang! The two goblets clinked together.

"Then we can celebrate in advance."

(End of this chapter)