Brilliant Years 1991

Chapter 166 It's a Mess

Since we are talking about cooperation, Cao Yukun certainly doesn't need to be humble.

Of course, basic courtesy must be in place.

Pu Weishi is not as tough as he appears to the outside world. Perhaps as Jin Zhijian said, Aijia Electric Appliances is indeed a mess that cannot be worse. HSBC holds a large amount of debt but has difficulty in recovering it, and is now in a headache. As long as someone is willing to take it, they certainly will not show any vicious or unfriendly look to this kind of good boy.

This is a business worth hundreds of millions of Hong Kong dollars, so it is worth Pu Weishi's being a little polite.

So overall we had a pretty good conversation.

He welcomed Cao Yukun to "compete" for the purchase of HSBC's shares in Aijia Electric Appliances, and even said that he had heard the story of Cao Yukun, a mainland businessman, who came to Hongkong to make a living. He expressed great admiration for his personal business acumen and looked forward to more cooperation between the two sides in the future, and so on.

After talking for about ten minutes, he called over a senior executive from HSBC.

His name is Eldon, a middle-aged white man who looks to be in his forties or fifties. As it turns out, he is a Scottish and the current general manager of HSBC's Red Sky and China region.

The affairs of Aijia Electric Appliances are exactly the business he is in charge of.

Being introduced by Jin Zhijian, he was of course an honor. And the company they were discussing was Aijia Electric Appliances, which was even more honorable. It was worthy for Pu Weishi to express his goodwill, but that was where it ended. A case worth 100 million was not worthy of the chairman of HSBC Bank discussing with you - so they went to Elton's office to continue the conversation.

This case was exposed nearly a week ago, and the insider had the news obviously even earlier. Therefore, HSBC has basically completed its review of the matter. The judicial part has been handed over to the court, but the part that belongs to assets is of course HSBC's current thorny problem.

Aijia Electric Appliances' current assets mainly include a factory, all the production equipment in the factory, and a large vacant industrial plot. Of course, like the factory, it is located in a remote area and is an industrial plot, so its commercial value is definitely not great. In addition, they have several patented technologies and outstanding payments to several Hongkong trading companies, about 7 million Hong Kong dollars. In addition, there are many products piled up in the warehouse that have not been shipped and HSBC has not yet counted them one by one, with a rough valuation of more than 11 million.

The balance sheet is clear.

But the debt of the entire Aijia Electric Appliances system is huge.

The amount of money owed for raw materials was not much, only about 7200 million, but in order to purchase the industrial land and subsequent construction, they borrowed a total of million in principal and interest from HSBC!
The 7200 million yuan was obtained by mortgaging the factory buildings and equipment of Aijia Electric Appliances, as well as a large industrial land that had not yet been used to build houses. Now it is due and must be repaid by the end of the year.

But even before the account of Aijia Electric Appliances was seized, there was only about 30,000 yuan left...

In addition, HSBC also holds 43.5% of Aijia Electric Appliances' shares held by Sun Chuanyu, the major shareholder of Aijia Electric Appliances. The shares were mortgaged at the beginning, and the company has been listed, so they are listed stocks. The market value of these stocks at the time was close to 1200 million, but HSBC was cautious and only loaned out million Hong Kong dollars. However, it was of no use, because Sun Chuanyu did not play by the rules at all and insisted on speculating on the Japanese yen. Then the company collapsed. Now the market value of the entire company before the suspension is only about million Hong Kong dollars. Once it resumes trading without any good news, it will most likely collapse to a piece of waste paper.

This loan of 1200 million Hong Kong dollars is obviously another bad debt.

After taking a quick look at some documents and listening to Eldun's introduction, Cao Yukun quickly figured out what was going on - this should have been a profitable business.

Aijia Electric wanted to raise money by going public. The recent red and empty stock market was doing well, so HSBC agreed to help. So, they lent money, bought land, and everything went smoothly. Aijia Electric went public. In this case, if Sun Chuanyu and his family did not mess around and patiently waited for the stock market to stabilize, HSBC could then make a fortune and get out. As a result, HSBC obviously did not know that Aijia Electric's products had not been selling well in the past year or so. What they showed to HSBC was a fake account. In order to cope with the inspections of HSBC and the United Stock Exchange, they even worked overtime to produce products even though they could not sell them, so that the products were piled up in the warehouse.

However, Aijia Electric Appliances did not use the funds raised from the IPO to repay the loan from HSBC immediately. Instead, they used the funds to speculate on the Japanese yen, which made the hole bigger and bigger. Sun Chuanyu had to come up with the bad idea of ​​building dormitories on the industrial land and selling them internally. As a result, the whole situation was exposed at once...

An absolutely rotten mess.

As for HSBC, they don't care how many years of imprisonment Sun Chuanyu will be sentenced to, nor do they care about the life and death of Aijia Electric Appliances. To be honest, the loan of 1200 million Hong Kong dollars that Sun Chuanyu got by mortgaging his personal shares is a small matter for HSBC.

The core issue is the loan of up to 7200 million in principal and interest!

Once you get the real accounts, it is not difficult to find out that, except for the factory land and factory buildings, which are still worth some money, the rest of Aijia Electric Appliances is almost worth nothing!
That piece of land and factory building, plus the equipment that can be sold as scrap metal, as well as the unsold products, including the remaining raw materials in the warehouse, all together, there may not be anyone who would buy them even if they were worth 3000 million!
The new piece of land they bought is worth some money and is larger in size, but they bought it through bidding. If they really want to resell it, 4000 million is already the maximum price!
Add the accounts receivable and other miscellaneous items, and take into account that HSBC will make a announcement. Once all the company's assets have been processed, the best possible outcome would be that they can sell HSBC's 7200 million!
But in addition to HSBC, Aijia Electric Appliances also owes money to other banks, which are also creditors.

For example, in the balance sheet, Cao Yukun saw the name of Wing Lung Bank.

It’s not much. The principal and interest of daily operating loans will only be a little over 300 million Hong Kong dollars by the second half of next year.

But the total amount of several banks added together is close to eight million!
If all the assets of Aijia Electric Appliances are sold off, the money obtained will definitely not be kept by HSBC alone. The creditors can only distribute the money in proportion, and everyone will suffer a small loss.

and……

Even if all the salable assets of Aijia Electric Appliances were sold, they could get back 8000 million, which would be just enough to fill the many holes including HSBC and Wing Lung Bank. However, that would mean that the net assets of the company would be zero. What about the stock market? What would the stockholders do?
Just one year after Aijia Electric Appliances went public, such a big scandal broke out, causing countless shareholders to lose all their money. So, can HSBC, which assisted Aijia Electric Appliances in its listing, escape responsibility?
Even if they cannot be caught committing evil or fraud at the legal level, how can the public not criticize them?

Working in a bank, after all, is about collecting deposits from the public and lending money to businesses. HSBC's large scale and influence cannot be supported by just dealing with big businessmen.

If HSBC's reputation among the public is ruined, the consequences will be even worse than losing tens of millions!

Well, it's a real mess.

However, Cao Yukun flipped through the information with an expressionless face, and he became happier the more he read.

It’s so bad!

Especially when it is such a bad movie like the triangular debt, it is even more interesting!

Now, if there is anyone besides me willing to take over him, that would be weird!
(End of this chapter)