A century-old wealthy family that rose from Shanghai

In September 1983, Hong Kong experienced a severe "Hong Kong dollar crisis," with the US dollar to Hong Kong dollar exchange rate rising to 9.6 at one point, and even exceeding 9 on the black market. Ultimately, the "linked exchange rate" was introduced, and the US dollar to Hong Kong dollar exchange rate stabilized at 7.8.

Hong Kong's economy itself is not in trouble; the main problem lies in political instability. Therefore, this crisis has not shaken the fundamentals of Hong Kong's economy. Of course, the real estate and securities sectors experienced a sharp decline because they had been heavily speculated on in the early stages.

But truly intelligent people can still see the tricks of the trade. For example, the average price of residential properties in Hong Kong has remained stable at HK$800 per square foot; a 500-square-foot apartment still costs HK$40.

Of course, the average salary in Hong Kong's manufacturing sector has also exceeded HK$100 per day. That's equivalent to being able to buy a house in 12 years without eating or drinking.

this day.

Simon Keswick, the taipan of Jardine Matheson, led a group of senior executives to Cheung Kong Holdings.

In July of this year, Jardine Matheson experienced a major upheaval, with Chairman Newbikin and Landmark Managing Director Bobby resigning. Newbikin received a £1 million subsidy from Jardine Matheson. At the same time, Simon Keswick, the younger brother of former Jardine Matheson Chairman Henry Keswick, took over as Chairman of Jardine Matheson.

Simon Keswick joined Jardine Matheson in 1960 and worked in branches in Hong Kong, North America, Japan, Singapore, and Australia. He returned to Hong Kong in 1982 as Managing Director and was known for his shrewdness, strength, and strategic acumen.

However, Simon Keswick was unable to fill the hole that Newbikin and Bobby had dug for Hongkong Land. The most pressing issue was dealing with the 'guarantee of the old wing of Miramar Hotel'. Cheung Kong Holdings had appealed to the Hong Kong court, hoping that Hongkong Land would pay HK$28 billion in back taxes and bear the corresponding interest.

At this time, Hongkong Land had debts exceeding HK$200 billion, earning it the title of "Hong Kong's Debt King"; and some assessments suggested that Hongkong Land was completely insolvent and could go bankrupt at any time.

Chen Wenjie, along with Melis and Lu Xiaoqing, received Simon Keswick and his entourage. His face remained perpetually calm. Of course, some media outlets have suggested that Chen Wenjie's heavy responsibilities have led to his lack of smiles or that he only knows how to fake a smile.

"please"

After the two parties sat down, Newbikini spoke first, saying, "Mr. Chan, Hongkong Land hopes to reach a settlement with Cheung Kong regarding the 'Old Wing of Miramar Hotel,' and we are willing to provide your company with cash and property compensation."

Chen Wenjie said unhurriedly, "Oh. So what exactly is Mr. Simon's compensation?"

Newbikin was quite displeased. All signs indicated that Hongkong Land had fallen into a trap set by Cheung Kong Holdings. Cheung Kong's shadow was behind the old Miramar Hotel wing, Exchange Square, and Hong Kong Electric. Newbikin and his two fools, Bobby, were unaware that they had fallen into someone else's trap, and were even initially smug about it.

But there's no other way. Right now, the only ones who can save Hongkong Land, besides the creditor banks, are CK Asset Holdings Limited and Cheung Kong Holdings Limited.

He controlled his expression and said sincerely, "We are willing to compensate HK$3.2 million in cash, plus a luxury property worth HK$1.8 million, totaling HK$5 million in compensation including the Tregunter Tower, in order to terminate the guarantee and sale and purchase contract for the old wing of the Miramar Hotel."

The old wing of the Miramar Hotel was initially sold to Carignan Group and Hongkong Land for HK$32 billion, but the two parties only paid a deposit of HK$3.2 million. Subsequently, due to the decline in the property market, no further payments were received.

With the current real estate market crash, the old wing of the Miramar Hotel, which was originally valued at 32 billion, is probably only worth 18 billion now.

Therefore, CK Asset Holdings Group pressed on relentlessly, insisting that Hongkong Land use the remaining HK$28.8 billion to buy the old wing of the Miramar Hotel.

Chen Wenjie shook his head and said, "Mr. Simon, this would be a huge loss for our Cheung Kong Group, and it's not a consequence we should bear. We still hope that you, as the guarantor, will continue to complete this transaction, pay us 28.8 billion, and you can keep the land."

Newbigen said with a stern face, "Impossible! Even if it's a court ruling, it will ultimately not be what we want."

Chen Wenjie said, "If the contract is executed, the court cannot possibly not support it."

The negotiations reached a stalemate for a time.

Just then, Chen Wenjie suddenly eased the tension by saying, "Of course, things would develop in a better direction if we didn't just talk about the old wing of the Miramar Hotel."

Here they come, their wolfish ambitions have arrived.

Newbegian could only bite the bullet and ask, "What else would Mr. Chen like to discuss?"

Chan Man-kit said, "Hong Kong Electric Company, Exchange Square"

"Impossible!" Newbigen exclaimed. "These are outside the scope of negotiations. We at Landmark will not."

Chen Wenjie gave what appeared to be a forced smile and said, “Yes. Mr. Simon, think it over carefully. These assets were originally intended to be purchased by our Cheung Kong Group at a reasonable price, but Newbikini and Bobby Auden snatched them up at a price higher than the market value. Of course, this is reasonable and legal, but if Hongkong Land doesn’t deal with these assets, it might not even be able to save the entire company. There’s an old Chinese saying—’A brave man cuts off his own arm,’ and I believe this is the best option for Hongkong Land.”

Newbijian felt a chill run down his spine. He felt that Chen Wenjie could not have come up with such a perfect plan, nor did he have such grand ambitions. There must be an old fox behind this.

From Chen Wenjie's words, Jardine Matheson's people had already realized that if Cheung Kong Holdings took action, Hongkong Land might not be able to save itself.

Jardine Matheson and the Newbikini family together hold just over 20% of Hongkong Land's shares; while Cheung Kong Holdings cashed out a significant amount of assets during this property boom, which undoubtedly gives it substantial capital, not to mention the entire Chan family behind it.

“It’s not that we can’t talk about these things! But I hope we can talk about the old wing of the Miramar Hotel first.”

Chen Wenjie said, "We can postpone it for six months and discuss all three projects together!"

Seeing the other party's firm attitude, Simon Keswick could only leave disappointed.

He understood that Hongkong Land could be hostilely acquired by CK Asset Holdings at any time, and if a deal could not be reached, CK Asset Holdings might try to take it by force.

In the study at 79 Deep Water Bay, Chen Wenjie reported the situation to his father.

At this point, Chen Guangliang rarely went to the Cheung Kong Holdings office anymore, having completely handed over the reins to Chen Wenjie. Of course, he still had to have the final say on the major decisions.

"Given Hongkong Land's current debt situation, it will have to make drastic cuts to avoid bankruptcy. Therefore, after reclaiming the old wing of Miramar Hotel, it plans to build a commercial complex (shopping mall + office building); Exchange Square will continue to be completed and will be transferred to Cheung Kong Holdings; as for HK Electric, it will be acquired by Hutchison Whampoa."

Chen Wenjie nodded and said, "Okay. I have already decided to have Hutchison Whampoa's General Manager, Simon Murray, continue to communicate with HSBC and Hongkong Land."

Simon Murray took office this year (1983), marking the formal and complete control of Hutchison Whampoa by CK Asset Holdings.

The reasons for having Hutchison Whampoa acquire Hong Kong Electric are as follows: First, there is a business affiliation, as CK Asset Holdings focuses on real estate development, while its subsidiary Hutchison Whampoa pursues diversified development. Second, Hutchison Whampoa has approximately 20% British ownership, with HSBC holding a significant stake, making the acquisition of Hong Kong Electric easier. Finally, Hutchison Whampoa will serve as a flagship for global expansion, while CK Asset Holdings' overseas development is primarily focused on real estate, beverages and food, and hotels.

The Cheung Kong Group that followed did indeed develop in the same way as the Cheung Kong Group led by Li Ka-shing in the previous life, but of course, it would be even stronger, due to its development in the 'food and beverage' and 'hotel' sectors.

More importantly, this is only the firstborn son of Chen Guangliang, Chen Wenjie, who will inherit about one-fifteenth of the entire family's assets.

Then, Chen Guangliang asked, "How is things going with Huo Jianning?" Chen Wenjie immediately replied, "I'm already preparing to acquire his company and bring him back into the Cheung Kong Group. I'm also preparing him to serve as the Group's executive director next year (1984)."

Canning Fok joined Cheung Kong in 1979, and then went out to start his own business for nearly a year. The result was predictable—an employee is just an employee, and not necessarily a boss.

Yuan Tianfan was like this, Ma Shimin was like this, and Huo Jianning was no exception.

"Yes, talent is very important. And Cheung Kong Holdings is so large that it can always accommodate more talent."

After chatting for a while, Chen Wenjie left the study.

He already has a clear vision for the future. After acquiring Exchange Square and HK Electric, Cheung Kong Holdings will officially expand into the European and American markets. Meanwhile, Asia (Hong Kong, Singapore, and Japan) will provide Cheung Kong Holdings with a continuous stream of profits.

at the same time.

On this day, Chen Guangliang hosted his younger brother Chen Guangcong on a yacht, accompanied by Chen Wenming and Chen Wenbo.

Among the five major industries of the Global Group (Global Shipping, Hong Kong Airlines, Global Real Estate, Wharf Holdings, and Global Trading), the Chen Guangcong family controls the other four industries with the Chen Guangliang family at a ratio of 15%:85%, except for Global Trading. This is the equity structure of Global Holdings Group.

Although his younger brother Chen Guangcong only has one son, Chen Wenbo (and two daughters), he has three grandsons, which is a good thing.

My nephew, Chen Wenbo, is 49 years old this year, and his eldest son graduated from university more than two years ago and works at the European branch of Global Shipping.

"Dad, should we consider privatizing Wharf Holdings recently? With Wharf's current market value of just over HK$60 billion, even if it's a friendly privatization with a 30% premium, we would only need to spend around HK$40 billion, which is an acceptable cost."

In 1981, Wharf Holdings' market value was over HK$9 billion, but it has now fallen by nearly 40%.

Even with a 30% premium, the total market capitalization is estimated at only 80 billion.

After thinking for a moment, Chen Guangliang said, "It's a bit hasty. We should wait until the first half of next year to privatize it, and the premium should exceed 31%. We need to show the utmost sincerity to avoid failing the process all at once and leaving future problems."

Chen Wenming tentatively asked, "I'm worried that if the negotiations go well, it will lead to an increase in asset value?"

"It won't be that fast."

"Ok"

What appears to be a benevolent privatization is actually taking advantage of minority shareholders' lack of understanding of the future.

Of course, in the end everyone was happy. After all, retail investors holding Wharf Holdings saw their market value increase by 31% for no reason. How could they not be happy?

Moreover, Wharf Holdings' financial situation was actually not good. Its investment in Harbour City, which lasted for more than a decade, left it with considerable debt; then, its investment in Times Square in the early 1980s incurred further debt.

In summary, low revenue and high debt are the current state of Wharf Holdings.

To be honest, if someone is paying a 31% premium, everyone should be secretly happy!

“Brother, this global shipping slump is more severe than we imagined. Many ports in Europe and America are full of ships, mostly oil tankers. If it weren’t for your command, it would have been really difficult for such a large ship as Global Shipping to turn around,” Chen Guangcong sighed.

Although the Universal Group had no debt when it had an 1800 million-ton deadweight capacity in 1978, nowadays, if the ships have no business, the port berthing fees, ship maintenance fees, and personnel maintenance are all huge expenses, so it is not only not profitable, but actually a money-losing business.

Chen Guangliang said, "That's how it is in the shipping industry. This time it's somewhat similar to the shipping slump of the 1930s. Now that I think about it, this is the beginning of a major 50-year cycle, so it may last until the late 1980s, which is quite a long time."

Chen Guangcong nodded and then said, "For now, we can only do our best to maintain the business, even if we don't make much money, as long as we can keep the ships afloat."

Although he has retired, he is semi-retired and still keeps an eye on some of the shipping businesses in Europe.

By the end of the year, Simon Keswick finally relented and agreed to negotiate on three assets: the old wing of the Miramar Hotel, Exchange Square, and Hong Kong Electric.

The reason is simple: in the previous life, Hongkong Land could still hold out until early 1985, and Exchange Square could be preserved. But in this life, Hongkong Land clearly lacks the necessary conditions in all aspects, and Cheung Kong Holdings is also secretly eyeing the entire company.

In this life, before the 1980s, Hongkong Land lost assets such as the Connaught Building (equivalent to two buildings in the core area of ​​Hongkong Land in Central), Star House Building, and the Landmark project (not the land). Moreover, the Mandarin Oriental Hotel in Central has never been able to compete with the Shangri-La Hotel. When the asset value was far lower than in the previous life, Hongkong Land's debt was several billion Hong Kong dollars higher than in the previous life.

Therefore, even HSBC and Standard Chartered Bank dared not say they would protect Hongkong Land to the death, and could only compromise with the Chan family to save the company.

Cheung Kong Holdings did not excessively pressure for a lower price and showed a certain degree of sincerity:

First, regarding the former Miramar Hotel wing project, Hongkong Land received HK$2.6 million in compensation, along with some high-end residential properties, totaling approximately HK$3.8 million. Of course, Cheung Kong Holdings essentially reclaimed the former Miramar Hotel wing site, effectively making a profit of HK$7 million.

Second, the Exchange Square project, packaged for 90 billion (original land cost 62.99 billion, construction cost 37 billion, total investment 10 billion), resulted in a 100 billion loss for Hongkong Land. In this project, CK Asset Holdings essentially gave Hongkong Land a significant portion of its profits.

Third, Hong Kong Electric Company was sold to Hutchison Whampoa for HK$7.2 per share, a loss of 10% compared to Hongkong Land's acquisition price of just over HK$8. However, Hongkong Land originally held a 10% stake in Hong Kong Electric, so the loss was not significant.

The three major projects have reduced Hongkong Land's debt by half (Hongkong Land has not yet actually spent on the subsequent construction costs of Exchange Square).

So after Newbikini announced the agreement with CK Asset Holdings, he breathed a sigh of relief and told the media, "From now on, Jardine Matheson will no longer be in a passive position."

That's true. In my previous life, protecting the trading square was a huge responsibility, so naturally, I was under a lot of pressure.

In this life, the inability to protect the trading square has actually reduced the pressure considerably.

Chen Wenjie, who rarely grants interviews, said in his usual calm tone: "Exchange Square and Hong Kong Electric were originally projects that Cheung Kong Group wanted to acquire, but the competition was fierce and the prices were too high at the time. Now, without other competition, and with reasonable prices, these two deals are very worthwhile."

When pressed further by the reporter, "Mr. Chan, what are your views on Hong Kong's future?"

"I'm optimistic! Of course, Hong Kong will inevitably face some challenges in becoming a world-class metropolis, but overall I remain optimistic and hope that both sides can sit down and have serious talks." (End of Chapter)