Traveling back to 1977

Chapter 831 Unveiling the Mystery
It has been three or four days since I arrived in Shenzhen.

Chen Fan has been quite busy these past few days, making several phone calls to inquire about foreign investment in hotels in China.

He hadn't paid attention to this matter before his transmigration. Apart from knowing that the White Swan Hotel was invested in by Mr. Huo, he knew almost nothing else.

After making the call, he learned that the investment in the White Swan Hotel, the China Hotel, and the Garden Hotel had been finalized as early as the end of 78.

At the end of 78, several Hong Kong businessmen were secretly invited to Beijing. During the discussion about the difficulties that my country would face in welcoming more foreign tourists after the reform and opening up, Bao Peiqing, the daughter of shipping magnate Bao, pointed out that there were too few hotels in Beijing catering to foreigners. She said that she had faced the predicament of not having a room to stay in Beijing several times and could only stay in Tianjin or Xi'an for a few days until there were rooms available in Beijing hotels.

This sentence immediately drew countless criticisms.

This problem is not limited to the capital; it is faced by all cities across the country.

The number of hotels is limited, and their facilities are outdated, failing to keep up with the demands of modern development. This is especially true in several internationally renowned popular cities, such as Beijing, Shanghai, Guangzhou, Wuhan, and Xi'an, where they generally lack the capacity to accommodate large numbers of inbound tourists.

In some places, let alone tour groups, even a few overseas Chinese visiting relatives might be too many to accommodate.

Against this backdrop, the higher-ups extended an invitation first, and after several Hong Kong businessmen discussed it, they finalized three investment intentions.

Mr. Huo and Peng Guozhen invested in the construction of the White Swan Hotel.

Led by Gordon Wu, together with Li Ka-shing, Lee Shau-kee, Kwok Tak-seng, and Fung King-hei, they invested in building the China Hotel.

Li Zhaoji, Ye Han, Guo Desheng, Li Mingze, and Huang Qiujian jointly invested in the Garden Hotel.

The completion of these three hotels has had a profound impact on Guangzhou.

Moreover, after recouping their investment, these wealthy individuals donated all their shares in these hotels to the public without compensation, and even the profits were used entirely for employee welfare and other public welfare undertakings.

Therefore, the White Swan Hotel is of particular significance. Following this "pioneer," the China Hotel and Garden Hotel projects will be launched in succession.

After learning more about this, Chen Fan became even more confident in investing in and building a five-star hotel.

However, as good as the project is, it needs a strong person to oversee it. Unless Chen Fan does nothing else but stay here and take charge of the hotel's construction, the project will either fail or be entirely dominated by the public party, resulting in a hybrid mess.

So the original plan remains unchanged: we need to bring in two powerful shareholders to "deal with" the company's manager.

Chen Fan had two investors in mind, the first of which was China Merchants Group.

With the involvement of China Merchants Group, Mr. Yuan can now handle all dealings with government entities, eliminating 70% of the problems.

Upon hearing Chen Fan's words, President Yuan was taken aback for a moment, then looked at him with a strange expression, "You want the China Merchants Group to get involved?"

Chen Fan nodded without hesitation and smiled, "The Shekou Industrial Zone is right here. If you can invest in this hotel, it will undoubtedly be of great benefit to the development of the industrial zone. Moreover, having this hotel as an example will also strongly promote your investment promotion efforts."

After a moment's thought, Mr. Yuan said, "The collaboration between the hotel and the industrial park is indeed an internationally accepted practice. In addition, with the establishment of the special economic zone just around the corner, the hotel's prospects are very bright. All things considered, this project is indeed very attractive."

He turned to Chen Fan and asked, "What are the conditions? How much investment is required, and what percentage of shares?"

Chen Fan smiled and said, "I have two options. Which one do you think is more suitable? First, the entire project will be packaged with an investment of 50 million US dollars. You will contribute 5 million US dollars and take a 10% stake. If other shareholders are to be introduced, the same method will be used."

What we just discussed was that Wanmuchun Company invested US$50 million to take a 70% stake. Now, China Merchants Group only needs to invest US$5 million to take a 10% stake, which is obviously a great bargain.

Mr. Yuan understood that the extra value wasn't free; China Merchants Group needed to contribute from a shareholder's perspective during the project's construction and the hotel's operation.

After careful consideration, he felt that this investment was worthwhile.

China Merchants Group started out in the shipping industry and is now backed by the Ministry of Transport, belonging to the state-owned enterprise camp. On the one hand, it can represent the public to some extent, and on the other hand, by making good use of transportation and shipping resources, it can also bring a portion of customers to the hotel.

However, instead of making a decision immediately, he asked, "What about the other option?"

Chen Fan smiled and said, "Another option is for you to join directly, together with the provincial and municipal tourism bureaus, to represent the public in holding shares. You won't have to spend any money, and you'll jointly own that 30% stake."

He paused for a moment, then chuckled softly, "However, you'll need to persuade the provincial and municipal leaders to see if they're willing to compromise on this."

Mr. Yuan frowned deeply. "Your plan is like trying to get something for nothing."

Chen Fan laughed and said, "It's you who are trying to get something for nothing, not me."

He looked at President Yuan meaningfully and said, "From the initial planning of the Shekou Industrial Zone to its current initial form, I think President Yuan has gained a deep understanding of the efficiency and methods of work in the mainland, right?"

He only said half the story, but Mr. Yuan knew the rest perfectly well.

He shook his head with a wry smile, thought carefully for a moment, and said, "Participating in this project would indeed be quite beneficial for China Merchants Group, but not participating wouldn't be harmful either. If we don't participate, will you still continue to invest?"

Chen Fan laughed and said, "Of course I will invest. However, I will bring in one or two other shareholders, otherwise Wanmuchun Company alone cannot offset the influence of Manager Gongfang."

Mr. Yuan looked at him and asked, "Have you considered any other potential shareholders?"

Chen Fan nodded. "This person must have a high level of influence in the mainland, just like the China Merchants Group, so that they can obtain the maximum authority. Therefore, in my opinion, Mr. Huo is the ideal candidate."

Upon hearing the name, President Yuan nodded in agreement. "If you can really secure Mr. Huo's investment, I am confident I can persuade the group's board of directors to participate. As for the method, that will need to be discussed at the board meeting before a decision can be made."

He then looked at Chen Fan and said, "However, Mr. Huo's company itself does not run a hotel business. The White Swan Hotel is a charitable act made for the development of the mainland. Are you confident that you can persuade him to invest in this hotel?"

Chen Fan smiled slightly, "Whether you herd one sheep or two, it's all the same. Adding another hotel won't make much difference to Mr. Huo. The $500 million investment is just a drop in the ocean for him, and it won't be a burden at all."

So, if I bring it up, he'll most likely agree.

Mr. Yuan blinked, looking puzzled, and after a few seconds, said, "I don't understand what you're saying."

Oh, so if there's no burden, will you definitely invest?

It seems like this doesn't make sense anywhere.

Chen Fan smiled slightly, picked up his teacup, took a sip, and said with a smile, "If I say he'll vote, he definitely will." President Yuan stared at him blankly for several seconds before suddenly realizing, "You know Mr. Huo?"

Chen Fan chuckled and said, "We know each other, and we have a pretty good relationship."

Mr. Yuan stood there stunned for a long while before letting out a long breath and exclaiming, "Everyone says that Vice Chairman Chen has a wide circle of friends. I thought it was only in the mainland. I never expected that he could even connect with Hong Kong businessmen. Today has truly broadened my horizons."

Chen Fan shrugged. "You flatter me too much. I only know one Hong Kong businessman, Mr. Huo. I'm not familiar with the others."

Mr. Yuan looked at him and said, "Knowing one Mr. Huo is not enough? Knowing one of him is worth half of the Hong Kong Chinese business community."

He then patted his thigh and said seriously, "We've almost finished our discussion. The basic framework will remain as we just agreed. For now, the public will contribute land and hold 30% of the shares, while you will contribute $50 million and hold 70% of the shares."

If other shareholders are introduced, each $5 million represents 10% of the shares, and you can give up a maximum of 20% of the shares.

As for the proposed investment plan by China Merchants Group, that's an internal matter for us. We'll make a decision on the specifics after our board meeting, and it's not related to the overall situation.

"Based on these conditions, you'll talk to the provincial and municipal leaders later to finalize the project. Other details can be adjusted later."

Chen Fan nodded slightly, extended his right hand, and smiled, "It's a pleasure to cooperate with you."

Mr. Yuan reached out and shook hands, asking curiously, "Vice Chairman Chen, I have a question. Would it be convenient for you to answer it?"

Chen Fan released his grip, took out two cigarettes, and handed them over, smiling, "Please speak."

Mr. Yuan took the cigarette, looked at him and asked, "You've gone to so much trouble to help Miss Zhou, and even used Mr. Huo's connections. Do you own any shares in the company?"

Chen Fan shrugged and laughed, "I don't own a single share of the companies in mainland China, but my uncle and cousin will never be stingy with anything I need."

The company in mainland China is wholly owned by the American company Wanmuchun. He personally does not own any shares, but the shares are all held by the parent company, so it is not considered a lie.

Mr. Yuan suddenly realized, "I understand."

If you give someone whatever they want, what's the difference between that and being the owner of the company?
He frequently deals with Hong Kong businessmen and is very familiar with nominee shareholding.

Therefore, it wasn't Chen Fan helping Zhou Yali at all, but rather Zhou Yali holding company shares on behalf of Chen Fan.

However, this nominee shareholding relationship is not very stable, and the Zhou family can back out at any time.

Thinking of this, President Yuan's heart stirred again. Taking advantage of the act of lighting a cigarette, he gave Chen Fan a few deep looks.

I just don't know if they signed a nominee shareholding agreement?

If so, then Zhou Zhengdong really treats this nephew very well.

After the two finished discussing business, they chatted for a while before the visiting leaders finally came up.

Mr. Yuan acted as the middleman, and he presided over today's negotiations. Both sides arranged their own rooms to rest for a while, which was actually a period of communication. More than ten minutes later, the negotiations officially began in the conference room next door.

The person in charge on the other side was a leader from the province. Chen Fan took the opportunity to take a few photos with him, which he can hang at home later.

On Wanmuchun Company's side, Zhou Yali naturally took the lead, with Ye Yufeng and a few others assisting.

Consultant Chen didn't even enter the meeting room; he sat alone in the chairman's office playing games.

The meeting was short, lasting just over half an hour. The negotiations concluded, and both parties formally signed the investment agreement. Amidst enthusiastic applause, city leaders and Ye Yufeng stood together, holding the investment agreement, while the accompanying reporters took photos.

The leaders were all very busy. After signing the agreement, they left in a hurry without even attending the banquet.

Mr. Yuan quickly exchanged a few words with Chen Fan before leaving as well.

After seeing the leaders off, Zhou Yali and the others returned to the office. Ye Yufeng and the others were fine, but when she saw Chen Fan still playing games, she was immediately furious. "Hey, you were the one who wanted to invest in the hotel. You didn't participate in the negotiations, and you don't care about the signed agreement. You're still playing games. Don't you have any sense of responsibility?"

Chen Fan didn't even bother to look at her. His fingers tapped on the keyboard, his eyes fixed on the computer screen. He said, "Please, if I hadn't talked to President Yuan beforehand, would you have been able to negotiate so smoothly?"
Also, quickly notify the American company to prepare $5000 million. Don't use your own money; keep that money in the bank until interest rates rise. Apply for a loan from a Hong Kong bank in the company's name. Hong Kong bank interest rates are low; the loan rate will be less than 8%, a significant difference.

Seeing that the two were arguing again, Ye Yufeng and the others quickly said goodbye and left under the pretext of work.

However, before leaving, Zhou Yali still left the issue of funding preparation to her and the financial director, Liu Yadong.

Of these four powerful figures, only Ma Liyuan, who was in charge of production, escaped unscathed; the other three were doomed.

In addition to coordinating funding with Liu Yadong, Ye Yufeng also had to find a suitable management team from the United States.

There is no concept of star-rated hotels in China, let alone how to operate a five-star hotel well. Even the most international hotels with the highest service level do not meet the three-star standard, so management teams can only be found from abroad.

Speaking of this, Chen Fan was particularly impressed by Mr. Huo, who actually sent more than 2,000 staff members of the White Swan Hotel, including the most junior doormen and cleaners, to the United States for training, which led to the White Swan Hotel's instant success.

Chen Fan also plans to learn from this approach, sending all workers abroad for training, and with the addition of a management team from the United States, he estimates that he will be able to train his own team very soon.

This hotel is just the beginning. Once we have our own hotel management team, we can open one after another as policies are relaxed.

Making money is only one aspect. If you can really turn five-star hotels into a chain, you will definitely be able to control a large amount of social resources, thereby driving the development of other industries. This is the most important thing.

Ye Yufeng was in charge of the overall situation, Liu Yadong managed the funds, and Fang Xiaoying, who was in charge of administration, naturally had to get involved to coordinate the hotel's construction and future management.

The three of them were all clamoring for a raise from Zhou Yali, but she just gave them a empty promise and brushed them off.

After the four of them went outside together, Zhou Yali leaned close to Chen Fan and whispered, "Hey, can we reveal the identity of the shareholder you found now?"

During the negotiations just now, only the hotel project was discussed. President Yuan did not reveal anything else, so she naturally did not know about Chen Fan's decision.

Chen Fan smiled and said, "Sure, one is the China Merchants Group behind President Yuan, and for the other, I'll see if we can arrange to meet tomorrow."

(End of this chapter)