In 1999, when the stock market was at its peak, Hong Kong Telecom occupied 97% of the Hong Kong telecommunications market, with a net asset value of HK$380 billion and stable cash flow.
The British Cable and Telegraph Company chose this time to make a move. It was extremely wise to sell Hong Kong Telecom, taking advantage of the high value to obtain much-needed cash flow.
The abacus is very good.
This transaction is worth US$35 billion and is an unprecedented big cake in Hong Kong’s history.
Since Dadong Cable and Telegraph Bureau has strict admission requirements, not many are eligible to share.
There were two main competitors at that time. One was Singapore Telecom, which was dominated by the Lee family of Sing Tao and was once the largest mobile phone service provider in the world.
The second one is Yingke Digital Company, which is preparing to swallow the elephant with the support of Li Chaoren.
Through a series of dazzling asset operations, Li Zekai, the boss of Yingke Digital Company, had the last laugh.
It spent US$13 billion plus company shares to acquire the behemoth Hong Kong Telecom. The total value of the merger was US$35.5 billion, forming the current Yingke Telecommunications Company.
The classic case of a snake swallowing an elephant was completed. The market value of Yingke Telecom reached a peak of HK$500 billion. Li Zekai became famous in one battle and received the title of "Little Superman".
Who would have thought?
The Internet high-tech bubble burst, turning the former prosperity into ashes.
The Hang Seng Index plummeted from 14,000 points to more than 8,000 points, and the concept of Internet high-tech stocks was brought back to its original shape.
Affected by the irrational and crazy decline of the stock on the Stock Exchange, the market value of Yingke Telecommunications Corporation plummeted to a low of HK$26 billion, which made the Wang Group realize its advantages.
The Internet high-tech bubble burst at the wrong time. "Superman" Li Zekai must swallow this bitter drink at this moment.
Regardless of its own ability, it carried out heavy debt M&A, with more than HK$300 billion of M&A funds all coming from capital operations, which greatly magnified the risks of the company's operations when the financial bubble burst.
Given that PCC Telecom is burdened with heavy debts of more than 14 billion U.S. dollars, it is unable to repay the debt on time.
Under Wang Yaocheng's instruction, creditors led by HSBC rejected the company's debt restructuring plan.
It is normal for banks to support the high and suppress the low. It is almost a miracle on earth to provide help in times of need.
move
It cut off Yingke Telecom's source of liquidity, and 3 billion US dollars in loans were overdue, pushing it into an abyss of destruction and the last straw that broke the camel's back.
There is already too much bad news on the Hong Kong Stock Exchange, which is plagued by tragedy.
In fact, Li Chaoren is capable of raising US$3 billion to extend the life of Hong Kong PCCW Telecommunications Company.
It's a pity that he didn't take action.
Because among the claims of Hong Kong Pacific Telecommunications Company, HSBC's US$6 billion loan will expire at the end of the year, Li Chaoren wonders whether the market will pick up by then?
Li Chaoren can't save the world, nor can he save his son's company. He really doesn't dare to try this.
Beginning of 2001
The United States is deep in economic recession and the global economy is in a bleak state. Only mainland China stands out.
Under such circumstances, Li Chaoren really didn't dare to bet. If he made a wrong bet, he would lose everything and drag the entire Li family group into the abyss of debt.
Sighted the opportunity
HSBC, which had taken the lead in the loan, struck back, completely wiping out Li Chaoren's family and acquiring the high-quality Yingke Telecommunications Company.
Although Yingke Telecom's difficulties are only temporary, if it cannot overcome the current hurdle, the only outcome will be bankruptcy and liquidation.
Free market competition in a commercial society relies on capital to speak for itself, without warmth and compassion.
in the office
Listening to Du Bo's detailed report, Wang Yaocheng's face showed a smile. Now that the controlling stake in Yingke Telecommunications Company has fallen into his hands, he is a cooked duck that can no longer escape.
Although Hutchison Whampoa did not give up and continued to appeal to the Hong Kong Court of Final Appeal against the Hong Kong Supreme Court's decision, this did not affect the Hong Kong Supreme Court's decision.
The judgment of the Supreme Court has legal validity and must be implemented.
Li Chaoren’s idea is simple;
It means delaying the execution of the judgment through legal proceedings, waiting for changes, and waiting for the market to recover. There is still a one-in-10,000 chance of a comeback.
No matter the quarrel, the Wang consortium has never been afraid of anyone when it comes to lawsuits.
Hutchison Whampoa can hire the best Queen's Counsel in Hong Kong, while the Wang Group can hire the best team of lawyers from the UK to join the lawsuit.
Want to argue?
If you fight a lawsuit for ten or eight years, there will be no result, and by then all the day lilies will be cold.
HSBC used the Hutchison Whampoa shares it held as collateral to make transactions with Bank of China and Citibank, and took up all the shares of PCC Telecommunications in their hands.
Even if Hutchison Whampoa wins the case in the Court of Final Appeal, it will not be able to save PCTC from remarrying.
Everything is a foregone conclusion, the process is reasonable and legal, and no one can turn the sky upside down.
Calculate the account carefully
This 100% acquisition of Yingke Telecom stock cost approximately US$8.35 billion, of which US$6 billion was the original acquisition loan, US$433 million in bank interest, and the rest was cash to replenish other creditors. Both parties were happy.
Compared with a year ago, when Li Zekai acquired Hong Kong Telecom for US$35.5 billion, the US$8.35 billion paid by the Wang Group was undoubtedly a bargain, a huge bargain.
All those in the know know;
Yingke Telecom is worth far more than this amount of money, and it is so undervalued that it is simply outrageous.
However, this is a cruel market. If you don’t have strong capital to protect your territory, you will eventually be dragged down to the bottom by the prehistoric predators lurking under the water and eat them, becoming delicious prey.
The only ones who suffered were Li Chaoren and his son who were divided and eaten.
The assets of the super-rich Li Chaoren have shrunk by more than half, and the flagship Hutchison Whampoa company may change hands to another person. His second son, Li Zekai, has been directly brought back to his original form, smooth and clean, and saddled with huge debts.
"Okay, well done."
People are in high spirits when happy events happen. Wang Yaocheng was so happy that he couldn't hide the smile on his face.
Now, the consortium owns Hong Kong's electricity, gas, communications and other public sector assets, which can continue to bring stable revenue, and fully control the lifeline of Hong Kong's economy, becoming the true uncrowned king of Hong Kong Island.
The honorary title of Lordship conferred by the Queen of England and the title of Royal Baronet are the highest honors awarded to Chinese people in history. The suffix "Lord" must be added to the title in news reports, which is highly recognized by Hong Kong society.
Invisibly
His status far exceeds that of Sir Run Run Shaw, Sir Li Ka-shing and other celebrities in Hong Kong Island.
No matter where you go, follow the rules of the game
In the hierarchical aristocratic circle, Wang Yaocheng indeed has a higher status than them.
Taking control of Hong Kong PCCW Telecommunications Company, it further strengthened its penetration into Hong Kong, the base camp, and spread its influence to every aspect of the lives of ordinary people in the market.
Hong Kong’s status as the uncrowned king is unshakable.
Wang Yaocheng doesn't have the slightest fondness for Li Chaoren, the man who invented the public stall area. He has led a large number of real estate developers into trouble, so it's nice to have the opportunity to step in.
Paying back debts is a matter of course.
Take inventory of your family assets;
The recent series of mergers and acquisitions, coupled with heavy investment in the technology field, have reduced the consortium's cash reserves to US$14.7 billion.
Fortunately, in the second fiscal quarter, the companies under the consortium can still contribute stable revenue and replenish the depleted cash pool.
"Abo, try the authentic Wuyishan Dahongpao in China."
Finished talking about Yingke Telecom
Wang Yaocheng greeted Du Bo for tea, and the conversation turned to a more relaxed topic: "Now, how do you divide the business of HSBC Bank?"
"Chairman, after the merger with British Smith Bank.
Qi Yaonian, executive director of HSBC and senior banking professionals, Miao Sicheng and I formed a top leadership team and stationed at the Smithsonian Bank headquarters in London.
Responsible for asset integration, overlapping organizational adjustments and bank branch closures.
Mr. Mo Yuxuan, led by Executive Director Shao Wilson and Vice President Wilkinson, will continue to stay in Boston and be responsible for integrating the North American business.
At present, London's merger plan has entered deep water.
More than 300 branches and business outlets will be eliminated in the British Isles, and more than 200 branches will be eliminated in North America. A total of more than 17,000 employees will be eliminated, and unnecessary expenses will be reduced by more than 1.2 billion US dollars annually.
These assets, which are highly overlapping with those of HSBC, will be sold in a package with an estimated value of between US$2.4 and US$2.7 billion. Many interested peers have already come to inquire about the price.
Because these assets are only the original value of fixed assets, the customer resources and loan business of the original Smith Bank business outlets will all be transferred to the nearest branches and business outlets.
The sale price can only reflect the value of fixed assets, which is relatively cheap."
Wang Yaocheng thought about it and said;
"There is no rush to do this. Let's do a good job of laying off personnel and outlets first. Now that the economy is in recession and fixed assets have depreciated sharply, it is not cost-effective to sell.
The sale of excess assets can be postponed until the market improves.
HSBC lacks working capital and can raise it in the market by issuing additional shares.
Mr. Buffett, the owner of Berkshire Hathaway, once said:
We must be greedy when others are fearful, and we must be fearful when others are greedy.”
Du Bo chewed this sentence carefully and found a deep asset; "This is...the counter-cyclical operation of assets."
"That's right."
"That makes perfect sense!" Du Bo nodded thoughtfully.
Wang Yaocheng took a sip of tea calmly, then reached out to pick up the teapot and poured it for Du Bo. Du Bo was still savoring it absentmindedly, unaware of it.
"Abo."
"Ah...Chairman, you called me." Du Bo woke up from his daze and responded quickly.
"I plan to co-opt you as an executive director and serve as the CEO of HSBC at the board meeting at the end of June. You must be mentally prepared and have a clear plan for the overall development strategy of HSBC."
When Du Bo suddenly heard the good news, he was so excited that he was at a loss for words. Blood rushed to his face and he stood up with a roar; "Chairman, this... this is too sudden."
"Sit down, sit down and drink tea, we brothers will chat slowly."
"Eh!"
Wang Yaocheng asked Du Bo to sit down and sip tea slowly, waiting for his excitement to calm down.
“My idea is that HSBC’s current expansion can come to an end, and the following work needs to be properly digested and integrated with the excellent professional ethics, valuable experience and professional risk prevention capabilities inherited by Smithsonian Bank for more than 100 years.
Learn from the excellent experience of North American banks in business development, implement lean bank management, improve administrative and business efficiency, and truly build HSBC into a top international large multinational bank.
This task is long and arduous.”
Du Bo said rigorously: "Chairman, I will work hard and never let down the trust of the chairman."
"Okay, I'm confident in your ability. You have more than enough to maintain your achievements but not enough to develop. The current restructuring stage of HSBC is very suitable for you to show your talents. You must implement lean management at the grassroots level to reduce overstaffing and low efficiency in large enterprises."
These are the two most fundamental tasks you face to cure your chronic illness."
"Chairman, I will keep this in mind and will definitely do what you told me."
"Okay, very good."
After seeing off Du Bo, who was still very excited, Wang Yaocheng thought about it for a moment in the office and was a little undecided.
He plans to equip Hong Kong PCCW with a strong helmsman.
After much deliberation, I finally came up with the idea of former secretary director Wang Huiyang.
Now
Wang Huiyang served as the executive vice president of Atlantic Business Machines Company. He had just been there for more than two months. Wang Yaocheng was hesitant to transfer this general back.
From the perspective of comprehensive talent cultivation, frequent transfers are not conducive to Wang Huiyang's growth.
The experience in Atlantic Business Machines Corporation, a large multinational enterprise, is very important for cultivating Wang Huiyang's ability to comprehensively lead the work of multinational enterprises.
In this case, we can only choose alternative option b, and temporarily maintain the current leadership structure of Hong Kong PCTC.
Deputy Director Hong Fu can be transferred to serve as the vice president of Xiangyingke Telecom, and then a group of middle and senior managers from Atlantic Business Machines Company and other companies can be transferred to take full control of the company.
But in this case, the Secretariat will have no soldiers or generals to use.
Chen Shi, who is also the deputy director of the Secretariat, and Shi Xueyi, two close men, cannot move at any time.
Because Chen Shi also serves as the director of the Royal Family Foundation's Financial Accounting Audit Department and controls the audit and supervision of the entire consortium, Wang Yaocheng will never rest assured if this key position is left to others.
Shi Xueyi serves as the chairman of the supervisory board of HSBC and is Wang Yaocheng's most loyal lackey. He firmly controls the core bank of the consortium and will not make mistakes. His importance is also irreplaceable.
These two guys are loyal enough, but unfortunately they are not talented enough to control a large multinational company.
Although I have been practicing for more than ten years, I still have a lot of flaws in my talent and ability.
Compared with the elite secretaries who graduated from world-famous schools in the Secretariat, they are much inferior.
But no way, who made Wang Yaocheng trust them!
Things in the world are just so unfair.
Chen Shi's Accounting and Audit Department brings together the elites of world-renowned accounting firms, many senior international accountants, all of whom have outstanding abilities. There is no problem at all in serving as the leader of the audit team.
But if you want to get ahead in the accounting audit office, just ability is useless.
He must also be fully trusted by Wang Yaocheng. In his past and present lives, Chen Yong has proven himself through his unpretentious work.
At this point, Chen Shi is an irreplaceable choice, and no one else can assume this role.
Therefore, with the expansion of the consortium, Wang Yaocheng still feels that he is short of major generals and does not have many useful talents. This can be regarded as a happy trouble.