Reborn in 08, a heretical cultivator starting a business

Chapter 170 Top-Tier Capital Operations, You're Truly a Talent! (Bonus Chapter for Monthly Tickets)
Although Sweet had already defaulted severely and failed to fulfill any of its commitments and debts made during the restructuring.

Instead, they illegally seized a large amount of Little Duck Electric's funds, adding more than 5 million yuan in new debt to Little Duck.

However, the relationship between the two sides has not been properly resolved.

Investing in or partially acquiring future technologies is pointless.

Moreover, this matter is not so easy to resolve.

In particular, Little Duck Electric Appliances has a huge debt of nearly 10 billion yuan!
It's terrifying; how to resolve the debt is a real problem!
Therefore, Cui Qian does not recommend that Wang Junshan make any investments or acquisitions.

"I understand, I'll go back to Jeju."

Wang Junshan fell into deep thought.

Sweet was a huge pitfall, having ruined Little Swan, Little Duck, and several other companies.

The cypress swans have escaped the pit, but the ducklings are still stuck in it!
If Wang Junshan doesn't intervene and this matter isn't resolved, Little Duck's main business of washing machines will suffer the same fate as in its previous life: once the factory is sold, it will completely decline.

From one of the top three washing machine giants in the country, to becoming an OEM manufacturer!
Subsequently, Little Duck Group transformed into industrial and commercial laundry services, achieving revenue of over 10 billion yuan again.

However, the civilian washing machine business was abandoned.

Even if it recovers more than a decade later, it will be too late.

That's a pity.

But if Wang Junshan takes action, then Little Duck Group can rise from the ashes like Little Swan and create new glories.

It was even more glorious than the Little Swan.

Simply put, Little Swan's advantage is its top-loading washing machine, while Little Duck's is its front-loading washing machine!
Not only in China, but also in Asia, the first drum washing machine was made by Little Duck.

Unfortunately, in the washing machine market in 2008, top-loading washing machines still dominated, accounting for 70% of sales.

But drum rollers only account for 30%!

But Wang Junshan knew that the future belonged to drum washing machines.

This is the advantage of the duckling.

"In the north there are ducklings, in the south there are swans, and in the west there is Yiling."

This catchy rhyme perfectly captures the distribution of the three giants in the washing machine market around 2000.

But now, it's become "In the north, ducklings have been hollowed out; in the south, swans have been reborn; and in the west, Yiling has vanished without a trace!"

All thanks to Sweet!
In 2004, Sweet acquired Little Duck's drum washing machine technology and production line precisely because of Little Swan's acquisition of Little Duck.

The goal is to fill the market gap for drum washing machines and expand the business by using Little Duck drum washing machines.

Unfortunately, Sweet ultimately chose to become a capitalist rogue, between a white knight and a capitalist rogue.

They successively emptied the assets of several companies, including Little Swan and Little Duck.

All that's left is the mess in front of us, and hundreds of millions of new debt!
A wise person does not stand under a dangerous wall.

Logically speaking, Wang Junshan should stay out of this mess.

But seeing a great brand, a former washing machine giant, being hollowed out and disappearing without a trace, Wang Junshan couldn't bear it.

Moreover, if handled properly, it is not impossible to turn the mess around and allow the ducklings to achieve new glory.

Even if things don't go well, they can be reborn from the ashes, just like the little swan in their previous life.

In its previous life, Little Swan became a subsidiary brand of the United States and did quite well.

And Little Duck can also achieve great success and become a sub-brand of Smart Home in the future!
If someone else were to do it, it would definitely fail.

It would be difficult for Wang Junshan to do it, but there is also hope.

Wang Jun is extremely skilled at playing the capital game!
The key factor is Vipshop's e-commerce resources.

It's entirely possible to revitalize the ducklings.

You could even make a fortune!

Of course, the most crucial issue is how to resolve the debt.

The only solution is through land policy.

After making a decision, Wang Junshan decisively called Shen Huaijin and the driver, and headed straight for Jeju!
Shen Huaijin, having learned the whole story, asked, "Boss, are we going to acquire the mess that is Little Duck Electric Appliances?"

Wang Junshan sighed: "Let's see how it goes!"

Wang Junshan wanted to first see the attitude and resolve of the Jeju State-owned Assets Supervision and Administration Commission!
If the other party has the guts, they should turn their backs now, sue Sweet, terminate the restructuring agreement, and bring Little Duck Appliances back into the Little Duck Group.

Wang Junshan could consider making a move!

However, if the State-owned Assets Supervision and Administration Commission hesitates and looks back, Wang Junshan will turn around and leave, never to bother with the matter again.

Those who wish to be saved by others must first save themselves!

The next day, Wang Junshan went to the State-owned Assets Supervision and Administration Commission of Jeju.

Mayor Zhao personally received Wang Junshan:
"Chairman Wang, I believe you have already conducted a detailed investigation into the situation of Little Duck Electric Appliances."

"Ugh, Sweet really screwed me over!"

"During the restructuring, they talked a lot of nonsense, saying that the transfer to Sweet would be done at zero cost and with zero assets, and that Sweet would assume the debt, invest funds, and revive the ducklings."

"To this end, we also used some land and other fixed assets worth more than 2 million yuan as compensation to repay the overdue wages and other debts."

"As a result, Sweet sold the land and transferred the money away."

"Not only did they not repay their debts, invest, or assume any debt burdens, they also emptied out many high-quality assets!"

"Two years ago, they also illegally transferred the Little Duck trademark to other companies."

"We've been completely screwed over... sigh!"

Seeing Mayor Zhao's melancholy expression, Wang Junshan was also filled with emotion.

Both the Jeju State-owned Assets Supervision and Administration Commission and the Seok-si State-owned Assets Supervision and Administration Commission have good ideas; they want Sweet to take over, revitalize Little Duck and Little Swan, and turn losses into profits.

Unfortunately, his sincere heart was met with a capitalist scoundrel who tried to take advantage of him.

Not only did they fail to invest, they also drained a significant portion of the ducklings' and swans' assets.

Not only did they fail to repay their debts, they also incurred a significant amount of new debt!
As a result, Little Swan sued Sweet, and even after winning the case, she has struggled to regain her freedom.

It was the Wuxi State-owned Assets Supervision and Administration Commission that spent 4.8 million yuan to buy back Little Swan.

Little Swan sold 30% of its shares to Sweet for 3.5 million yuan, and now it has been bought back for 4.8 million yuan.

In two or three years, not only did they fail to revitalize Little Swan, but they also suffered heavy losses.

The State-owned Assets Supervision and Administration Commission of Wuxi City lost 1.3 million yuan.

Little Swan suffered a loss of over 5 million yuan after Sweet sold off a large amount of its assets!
More importantly, this upheaval turned Little Swan from one of the top three giants in the country into a second-tier brand, until it was acquired by Midea and returned to its peak.

The little duck's situation was even more difficult.

Wang Junshan sighed: "Mayor, let's be honest, Little Duck Group is in dire straits, with a clear negative net worth, and a very high amount at that."

Mayor Zhao nodded: "Don't worry, Chairman Wang, the Jeju State-owned Assets Supervision and Administration Commission will not let the company suffer losses."

"As long as Future Technology is willing to take over and revitalize Xiaoya in a down-to-earth manner, we will make up for this debt through land policies, and we will definitely not let you suffer a loss!"

"Land policy!" Wang Junshan laughed.

This is exactly what he values!
These days, capital plays a role, but land plays are even more sophisticated.

Take Little Duck Group as an example; it doesn't have many assets.

The factory buildings and production line equipment are old and outdated, not worth 20 million. The brand has also been affected and is no longer at its peak, worth only 30 million.

The most valuable asset is the factory land.

But they were all either mortgaged, seized, or auctioned off by the courts...

The factory area has shrunk from 1100 mu ten years ago to 440 mu.

Definitely a liability.

For example, the Xiaoya General Factory covers 300 acres and is located in the High-tech Zone, currently designated as industrial land.

It was mortgaged to ICBC a long time ago, with a loan of 2.8 million yuan. Now, the principal, interest, and overdue penalty interest have reached more than 4 million yuan.

But industrial land is worthless!

Although due to special circumstances, the property was initially overvalued at one million yuan per mu, totaling 3.5 million yuan, and was mortgaged for 2.8 million yuan.

In reality, industrial land costs only 40 yuan per mu, which is worth 1.2 million yuan.

They've been insolvent for a long time!

ICBC must be devastated!
But what if Jeju Island intervenes and transforms this industrial land into commercial and residential land?

That would increase its value!

In 2008, the price of commercial and residential land in Jeju was between 150 million and 350 million yuan per mu.

Although the location of the old Xiaoya farm is currently in the eastern suburbs of the city, it is still within the city. Even if it doesn't sell for 300 million, 200 million per mu is not a problem.

300 acres were converted into commercial and residential properties and sold to developers for 6 million yuan!
With this operation, a significant portion of Little Duck Group's debt hole can be cleared!

This is completely compliant and legal, and it's called "moving out of the city and into the park"!
The government encourages old factories in the city to relocate to the suburbs to build industrial parks, while the old factories are converted into commercial and residential land for commercial development!
Also known as "retreating two steps and advancing three steps".

Industrial relocation and development of the tertiary sector.

This policy has also become a winning formula for many State-owned Assets Supervision and Administration Commissions (SASACs) to revitalize loss-making state-owned enterprises.

There's no way the local government can come up with 6 million yuan to settle the debt.

The only way to reduce debt is through this policy, which transforms worthless industrial land into commercial and residential land, increasing its value fivefold, and then selling it to real estate developers to build residential communities.

In the previous life, this is how the Jeju State-owned Assets Supervision and Administration Commission operated.

They converted 300 acres of old factory land into commercial and residential properties, and sold the proceeds to pay off debts.

At the same time, the land was relocated to a new industrial park in the Chaogao New East District (almost outside the city center).

As expected, Mayor Zhao still wants to do it this way; it's the only solution.
"Don't worry, turning 300 acres of old factory land in the city into commercial and residential land can fetch around 6 million yuan. After deducting taxes and fees, we can pay off the bank debts."

"In this way, most of the principal owed to the bank will be cleared. As for the interest and penalty interest, the State-owned Assets Supervision and Administration Commission will communicate with the bank to carry out debt restructuring, waiving what can be waived and reducing what can be halved."

Wang Junshan nodded; this was indeed a good idea.

Banks are also worried about bad debts that they can't recover year after year.

If Little Duck Appliances goes bankrupt, forget about everything else.

If the debt can be restructured and local governments cooperate to convert it into commercial and residential properties to cash out and recover the principal, that would be the best outcome, and the interest would be irrelevant.

"What about the remaining debt?"

Wang Junshan was well aware that before the restructuring of Little Duck Group in 2003, its debt was only 3.5 million yuan. During Sweet's operation, not only did it not repay its debt, but it also incurred 5.1 million yuan in new debt.

Total debt reached 8.6 million!
During this year's period of stagnation, Xiaoya operated its own business and, although it did not continue to suffer losses, it even made a slight profit.

However, the penalty interest and litigation costs snowballed, adding another 1.2 million.

Total liabilities reached a staggering 9.8 million!
"With a total debt of over 9 million, the main factory was converted into commercial and residential land, resulting in a tax deduction of over 5 million. Interest was halved, and penalty interest was waived, which can offset the principal and interest debt of 6.5 million from three banks."

"The government will find a way to restructure the remaining 300 million yuan in debt, either through installment payments or government subsidies."

"In short, we will give you a Little Duck appliance that is light and easy to use."

Wang Junshan smiled: "Mayor Zhao, Xiaoya's most core asset right now is its 300-mu main factory. Turning it into commercial and residential land can indeed clear nearly 7% of its debt."

"But if the factory is converted into commercial and residential land for real estate development, then even if I acquire Little Duck Electric Appliances, I won't be able to continue production, right?"

Mayor Zhao nodded: "We have also considered this issue. We can provide you with a 300-mu industrial park in the High-tech East Zone, or a new 300-mu industrial park near the Jeju International Warehouse."

"No, this will delay production. It will take at least six months to build the new industrial park."

"What about production for the next six months? We still need to pay employee salaries and social security contributions."

"The most important thing for Xiaoya right now is to resume production as soon as possible. I can invest 1 million yuan to upgrade the production line, but we must resume production as soon as possible in order to make a profit and for Xiaoya to get out of its predicament."

Mayor Zhao frowned: "That's true, but if we do that, the main factory can't be demolished, and we can't auction it off to settle the debt. We can't delay the bank loans anymore."

Wang Junshan sighed: "There's no other way. In order to reduce the debt and maintain production, we can only make more sacrifices in future technology."

"Chairman Wang, what do you mean..." Mayor Zhao couldn't understand what Wang Junshan was up to!

Wang Junshan said, "If you want to reduce debt and maintain production, there is only one way. You convert the 300-mu washing machine factory into commercial and residential land and transfer it to Future Technology. Future Technology will invest 6 million yuan to buy it and promise not to use it for real estate development within 7 years, but to continue to maintain production and employment, so that Xiaoya can turn a profit and get out of its predicament!"

Upon hearing this, Mayor Zhao was stunned, but then he understood what Wang Junshan meant:
"Chairman Wang, your idea is excellent! It can maintain production and also reduce debt!"

"However, your risk is not small."

"You've taken a big gamble!"

If it were someone else, they would naturally think that Wang Junshan was selfless and made a complete sacrifice.

But Mayor Zhao saw things clearly: Wang Junshan was gambling!
Betting on the appreciation of these 300 acres of commercial and residential land seven years from now!
Industrial land is now 40 yuan per mu, but it will be converted to commercial and residential land for 200 million yuan per mu!
Wang Junshan acquired the land for 6 million yuan, but will not develop it, only maintain production.

Seven years later, at the end of 2015, Little Duck turned a profit and emerged from its predicament.

Wang Junshan is moving his factory again to develop this 300-acre commercial and residential land!
Then the land price for this commercial and residential land will not be 200 million yuan per mu, but 600 million, or even 800 million yuan per mu, or even higher!

Then this commercial and residential land will go from the current 6 million to 18 billion, or even 24 billion, or even 30 billion!
A 4-5 times return!
There are indeed risks, but they are very small. Everyone knows that land prices will continue to rise in the future.

Unless the economic crisis continues to erupt!

This behavior is blatant land hoarding!
They acquire land at low prices, hold onto it without developing it, and then develop or resell it seven or ten years later when the land price has increased several times over!
Li became the richest man through this model!

They acquired the land at rock-bottom prices ten years ago, and will redevelop it 15-20 years later.

You can make money even with your eyes closed!
But the city's development was dragged down.

Such a high-quality place, if you keep it hidden and don't develop it, aren't you just cheating people?

Wouldn't that hinder the city's development?
You may have made money, but you've dragged down the city's development and planning!

This kind of land hoarding has become a target that local governments must crack down on!
But Wang Junshan knows how to play the game!

I'm not hoarding land to increase its value, but rather to ensure production!
To resume work and production as soon as possible, and to revitalize Little Duck washing machines!

In order to pay employees their wages and generate revenue for the local area!

To create more jobs and boost GDP!

What was once a serious issue of land hoarding that had to be severely punished has now become a testament to the selfless responsibility of entrepreneurs!

That's amazing!

No one could say no!

"Damn, what a talent!"

Mayor Zhao couldn't help but slap his thigh and cheer.

This approach is unconventional, but it's definitely feasible!

(End of this chapter)