Chapter 349 Delisting and Privatization Come to an End
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It is different from HSBC, which suffered serious losses and asset write-downs during the Southeast Asian financial crisis in 1997.
Atlantic Business Machines Company has excellent quality. In the five fiscal quarters from 1997 to 1998, it has repaid more than half of its more than 20 billion US dollars in loans, demonstrating its strong profitability.
The third fiscal quarter report of 1998 showed that only $3.86 billion in loans remained outstanding.
This debt ratio is simply shockingly low.
What's more, all investors are waiting for the privatization process to start, and Royal Fund must provide generous redemption conditions to meet investors' expectations.
If the money is not provided enough and everyone holds their chips and does not relax, the worst possible outcome is that they will all delist together.
Wang Yaocheng had no other choice but to use money to deal with these guys who were taking advantage of the situation.
Based on similar cases in history, through precise mathematical models, psychological analysis, and market research, Royal Fund has delayed the privatization process several times and repeatedly balanced the relationship between all parties, showing a high degree of caution.
Finally, the trading price for redemption was determined to be 43% higher based on the average stock price of the previous ten days.
Atlantic Business Machines also suspended trading on the Nasdaq market and registered its equity.
Today is the last day of equity registration
The latest report shows;
Royal Fund’s shareholding has reached 93.22%, perfectly completing the agreed privatization and delisting plan.
There will be some growth in the final number, but there is not much room left.
In addition to Atlantic Business Machines' 3% senior employee option pool and the 1% stock option that individually incentivizes Mr. Chambers, there are not many remaining shareholders, a little more than 2%.
Most of these people are the leaders who have accepted the truth. They are either loyal fans of the company, or they are zombie stocks that cannot be shaken and can only be left to their own devices.
Calculate it this way;
Based on the 43% increase in Atlantic Business Machines' market capitalization premium of US$255.6 billion, it would cost up to US$46.074 billion to redeem the 18.02% registered equity.
Redemption at a high premium is a market practice. This is to eliminate as many small and medium-sized shareholders as possible to facilitate company management after privatization and avoid trouble.
A privatized company still has hundreds of thousands of small and medium-sized shareholders. The public is right when the public talks, and the mother-in-law talks about the mother-in-law, which is not conducive to improving the administrative efficiency of the company.
In addition, it is necessary to prepare another US$2 billion to acquire the remaining few shares.
Does the royal family fund have so much money?
Of course not.
Throughout 1998, a series of large-scale mergers and acquisitions took place.
In addition to the privatization of HSBC Bank, it also purchased the non-performing asset package of HSBC, the asset package of Samsung, and a 4.5% stake in Samsung Electronics, with various expenditures reaching US$11 billion.
also
In the financial showdown on the Hong Kong Stock Exchange in August, Royal Fund entered the market on a large scale and consumed more than 8 billion U.S. dollars, a total of 62 billion Hong Kong dollars.
He successfully assisted the Hong Kong government through this biggest crisis, repelled the financial predators led by Soros, and safeguarded Hong Kong's economic development achievements. It was highly praised by the mainland and Hong Kong governments.
This is a large amount of expenditure, but also a large amount of income.
The largest amount of revenue is Mr. Rupert Murdoch's US$6.72 billion investment in Cisco Systems from News Corp. In the third fiscal quarter, the group's income was US$5.45 billion. The large expenditures offset the income, with net expenditures of more than US$7 billion.
As of the end of November
The amount of cash held by the royal family fund is about 8 billion US dollars. Therefore, most of the huge funds to start the privatization process need to be supported by bank loans, totaling almost 40 billion US dollars.
Half of them are provided by HSBC, mostly long-term loans of more than three years.
Others are provided by major banks such as Lloyds Bank, Royal Bank of Scotland, Deutsche Bank, Mitsubishi Bank, Citibank, and Bank of America, and are mostly short- and medium-term loans of one to three years.
Atlantic Business Machines Company itself was the best loan collateral, and major banks rushed to invest in it, competing for a share.
Of course, the biggest cake must be reserved for the consortium’s core bank, HSBC, to enjoy exclusively.
Just after getting rid of its debt burden, Atlantic Business Machines suddenly took on a huge loan of 50 billion U.S. dollars, and it had to repay more than 2 billion U.S. dollars every year in bank interest alone.
Fortunately, the debt ratio is only 1/3 of the total assets, which is completely affordable.
In the study
There was silence, only the rustle of the pen across the paper
After a while
Wang Yaocheng raised his head tiredly, screwed on the gold pen, rubbed his sore wrist and took a long breath.
The heavy desk work has finally been completed. Important documents from various companies in the consortium need to be approved one by one. The collection is a huge workload, and it is not easy to handle it.
He stood up and twisted his waist and hips to loosen the stiff muscles, and walked back and forth a few times along the large office to get some exercise.
He stopped and looked thoughtfully at a report from HSBC Bank.
This matter...
Wang Yaocheng walked to the desk easily and pressed the pager;
"Miss Guo, ask Director Du Bo to come over. I have something to arrange for him."
"Okay, let me know right away."
a moment later
Du Bo came in with a folder and said seriously, "Chairman, I'm going to report to you. This is Nokia's dividends for the first three fiscal quarters. The total amount is 262 million U.S. dollars. The investment return is not good."
ideal.
In addition, the Red Hat Venture Capital Fund that Director Tian is responsible for needs to replenish capital, and the tentative scale is US$2 billion. This is an application document and requires your personal review."
Since 1995
Nokia firmly occupies the top position in mobile phone sales in the world, but its product profits are not satisfactory. Excluding the high labor costs in Northern Europe, the profit rate is generally 5.5% to 6%, and the annual profit is more than 3 billion US dollars.
In contrast, the American Motorola Company occupies the high-end market, and its profit margin can reach more than 30%.
Nokia, which emerged from Northern Europe, is currently aiming to consolidate and expand the market. Its mobile phone products will start from the mid- to low-end and gradually move up to the high-end.
Capture the market first, then increase value.
From Xiaobenzi, Hanbangzi to Vikings, they all follow this market law.
This is also the reason why Wang Yaocheng is not in a hurry to launch a mobile phone project;
In the era of feature phones, there is not much profit to be seen, but the market valuation of Atlantic Business Machines will soar significantly.
As we prepare for the privatization and delisting process, we have to pay a lot of money, which is tantamount to causing trouble for ourselves. Why bother?
"Oh, how much is Nokia's market value now? Where is our equity?"
"So far, the market value is 93.7 billion US dollars, and we hold 6% of the equity, which is about 5.5 billion US dollars."
Wang Yaocheng thought about it for a moment and said:
"To sell 4% of the equity in exchange for cash flow, Tianyuan's venture capital fund needs to replenish the capital, and this money must be prepared for him. Nokia maintains a position on the board of directors and retains a symbolic 2% of the equity!"
"
"OK."
Wang Yaocheng walked to the sofa and pointed: "Sit down, let's sit down and chat."
After saying that, he sat down first, picked up the cigar and cut off the cap. Du Bo immediately put it on fire, and Wang Yaocheng lit the cigar on fire.
A strong smell of cigar smoke filled the air, with a hint of tobacco aroma.