Brilliant Years 1991

Chapter 167 Cao Yukun's Advice
Exclusive business is certainly easier to do and negotiate.

As long as there is no one else in the world who has the ability and determination to revive Aijia Electric Appliances and make its products sell well again, this business will indeed be a purely unique business.

But... of course, although he is not an expert in capital operation, Cao Yukun has been paying close attention to the capital market in Hong Kong for two months. Whenever he has a casual chat, he always asks everyone he can contact to tell him about Hong Kong's past business stories and shopping mall battles.

The benefits are huge.

So in fact, before he really finished reading the information, Cao Yukun had already guessed how HSBC would want to deal with the case next - from the creditor's point of view, it is easy to deal with. The company is insolvent. Just search and search. There are always a few pounds of nails in a broken ship. Sell them and try to raise the price as high as possible. Every creditor will probably have to pay a small loss, but it will be limited. In the asset operation of the bank, such examples are not uncommon. A small loss of hundreds of millions will not affect the development and foundation of HSBC. Such a small matter is not even enough to affect their financial report this year!

However, it would be easy if things were that simple.

The difficult thing is that HSBC cannot be so shameless!

They cannot ignore the interests of so many shareholders and only care about making their own money back.

So...their best solution is to use Aijia Electric Appliances as a shell and sell it to companies that want to go public through a backdoor listing.

As for backdoor listing, the principle is very simple. There are a series of procedures for listing approval, various financial compliance requirements, and a long time of review and waiting. Backdoor listing is simple. Pick a cheap, rotten company whose business is no longer important, the kind with a rock-bottom stock price, acquire it, and then issue new shares to replace the company that you originally planned to list. Once the asset placement is completed, it is equivalent to listing!
Convenient.

However... again, this stall is terrible.

The shells that everyone likes most are definitely those whose business has shrunk and have long stopped making money, but they are just thin and malnourished, without too much rotten meat on their bodies, especially those that are not carrying a huge debt!
When it comes to making shells alone, Aijia Electric Appliances is unqualified.

Absolutely unqualified.

The production of his own factory has no future. The so-called fixed assets and inventory can only be revitalized if he continues to do this business. Otherwise, they are worthless. Even if some value is converted to him, what about the total debt of more than 80 million?
Taking the liabilities into account, the company's assets are already negative!

If HSBC gives you all the shares it holds without paying a penny, would you dare to accept it?

As soon as I took it, I was asked to repay the debt of more than 80 million!

Although a shell is not cheap, it is not worth more than 80 million!
The usual practice is to spend several hundred to tens of millions to obtain absolute controlling rights in a shell company, and then carry out targeted share issuance and asset placement, which will make shareholders happy and the exchange approve.

But 80 million to buy a shell...

"Well, it's harder than I expected... Hehe, it's not that easy to do!"

After reading all the information provided by HSBC, Cao Yukun pretended to ponder for a moment, then put the information back on the coffee table with a somewhat grim look on his face, looking quite unnatural.

Of course, the other party must be a business veteran.

But the show still had to be played. "How does your bank plan to deal with this case? Do you have any contingency plan?" As expected, Eldon said bluntly: "Find a suitable company to take over. You know, the Hongkong stock market really needs such a shell company. The listing review is too slow. The conditions are also harsh."

His English doesn't have much of a Scottish accent, and he even occasionally throws in a few Cantonese words.

Cao Yukun nodded slowly, with a sincere look on his face, "Then it seems that I came to the wrong place. I am not here to seek a backdoor listing. I am afraid... I can't afford such a high price!"

Eldon blinked and spread his hands. "It's okay. Mr. Cao, you were introduced by Mr. Jin. I believe you have your own ideas about Aijia Electric Appliances. We can talk about it."

Cao Yukun hesitated for a long time before speaking again, saying, "I want to confirm one thing first. How many shares of Aijia Electric Appliances does your bank have now?"

As expected, Eldon showed a little embarrassment on his face when he heard this, but he soon smiled and said, "We are the planner and underwriter of this company's listing, so... 57%!"

Sure enough!

In other words, in addition to the 43.5% pledged by Sun Chuanyu, they still held up to 13.5% of Aijia Electric Appliances shares, which they had not had time to actually sell - probably because Sun Chuanyu acted too quickly and did not leave HSBC any chance to slowly sell the shares!
To be in underwriting to this extent... it must be extremely embarrassing.

After thinking for a while, Cao Yukun said, "If your bank wants to sell the 57% equity, I am willing to take it over. My offer is one Hong Kong dollar! But I have a prerequisite. HSBC and other creditors of Aijia Electric Appliances must provide a two-year extension for all loans on the basis of keeping the current loan amount unchanged."

Eldun was stunned and pursed his lips.

You sell all the shares to me for one Hong Kong dollar, but after I take over, I will acknowledge the debts of all creditors and will repay them. It just takes some time, so I have to extend the debts - a bit like getting something for nothing!

As long as HSBC dares to nod, it means that they will directly give up the 57% equity value of Aijia Electric Appliances in their hands. The most direct value of Sun Chuanyu's 43.5% shares is the loan of 1200 million Hong Kong dollars he borrowed from HSBC with this as collateral.

With this move, HSBC will give up an estimated paper value of more than 20 million.

But at the same time, in exchange for Cao Yukun's acknowledgment and promise to repay their debt of 7200 million Hong Kong dollars after taking over - with such a mess, it is impossible for HSBC to not pay a penny!

"I'm sorry, Mr. Cao, your suggestion is too cruel and too harsh for us..."

Eldun's expressionless face showed a hint of displeasure.

The tone has become a little stiff.

But Cao Yukun continued with a smile: "But I won't take it for nothing. I can sign a bet agreement with HSBC and bet my personal wealth! If Aijia Electric Appliances cannot pay off the principal and interest after the loan extension expires, then I will pay the full amount of the loan to your bank!"

After a pause, he continued with a smile: "That is to say, no matter how the business performance of Aijia Electric Appliances is after I buy it, I will personally guarantee that HSBC's debt will be recovered without any impact."

(End of this chapter)