Reborn in 08, a heretical cultivator starting a business

Chapter 171 High-end gameplay: 6 million becomes 200 billion!
The 400-mu industrial land of Xiaoya General Factory was converted into commercial and residential land and sold to Wang Junshan for 6 million yuan.

Then they used the 6 million to pay off debts and upgrade the production line.

Little Duck Group resumed work and production, and its washing machines were sold directly on Vipshop, which generated profits!
That way, wages can be paid, and employees are happy!

The State-owned Assets Supervision and Administration Commission (SASAC) is pleased that it no longer needs to provide financial support and advance payments, thus relieving itself of a heavy burden!
The bank was happy that its bad debts were cleared.

It can also generate revenue and tax payments, increasing fiscal income, which makes local governments happy!

It can generate GDP, boost employment, and completely revitalize the duckling industry!

The province and city are happy to see a troubled company on the verge of bankruptcy and heavily indebted transformed into a high-quality enterprise that is operating normally and paying taxes!
All are happy.

Who cares whether Wang Junshan hoards land or not?

They did that to maintain production and revitalize the high-quality enterprise, Xiaoya!

Even the King of Heaven himself has arrived; these are all the optimal solutions!

Wang Junshan could also earn more.

With 600 million yuan to acquire land, one could simply mortgage the land and take out a loan, thus incurring a loss of interest for seven years.

In these seven years, Little Duck has been able to resume production and manufacture conventional top-loading and front-loading washing machines, thus achieving profitability.

Plus, with the future smart home's partitioned washing machine, you'll earn even more!

Of course, the value of this land will also skyrocket.

Seven years later, at the end of 2015, a financial center was planned across from the Little Duck Factory, and the tallest building was under construction.

The CBD is planned not far away, and the city center is shifting eastward.

The eastern suburbs have now become the new city center!

At that time, the land price for commercial and residential land will no longer be 400 million yuan per mu, 600 million yuan per mu, or 800 million yuan per mu.

Instead, it's 1000 million per mu, or 1200 million per mu!
In 2017, it could reach 1400 million yuan per mu!
The value increased sevenfold, turning 600 million into 42 billion, resulting in a net profit of 36 billion!
However, this is only due to the increase in land value.

If Wang Junshan had developed this land into a residential community in 2017, it would have sold out completely in 2018 at 3 yuan per square meter!

The land area is approximately 300 acres (about 20 square meters), with a plot ratio of 2.5, a building area of ​​50 square meters, and a total revenue of 150 billion yuan!
The land price is 1200 yuan per square meter, plus construction cost of 2000 yuan per square meter, the total cost is 16 billion yuan.

The gross profit was 134 billion, and after deducting 30% in taxes and fees, there was still 93.8 billion left!
The profits are shockingly high!

If it's furnished with high-end interiors, it can sell for 3.5 or 4 yuan per square meter, making even more profit.

More importantly, this 300-acre factory was operating normally and producing normally for several years before the demolition!

If the production lines are fully expanded and upgraded, based on the Midea Wuxi factory's output of 1.8 units per mu, the 300-mu industrial park can produce 500 million washing machines per year!
Even if you only earn 800 per machine, you can still make 40 billion a year!
Even with an annual production of 200 million units, they could still earn 16 billion.

Earning 130 billion over eight years is no problem.

Wang Junshan will earn at least 20 billion yuan from this deal.

Wang Junshan's investment was only the initial 6 million!
It's a great deal, absolutely a great deal!
"Chairman Wang, your idea is good, but there are still some problems in its implementation."

Mayor Zhao began by saying, "First of all, the procedure is wrong."

“You can’t just pay for the land and then have it converted into commercial and residential land and given to you for free. That’s not compliant with regulations.”

"It has to be done according to the process. The government first plans and conducts feasibility studies, then submits an application to change the nature of the land, the province approves it, a soil survey is conducted, then planning is adjusted, a judicial assessment is carried out, then an auction is held, various bidders compete, and finally the transfer of ownership is registered."

"However, in order to ensure that you successfully acquire this land, we can impose some conditions and restrictions during the judicial auction."

"For example, bidding companies are required to assume the debts related to Little Duck Appliances and to guarantee continued production of washing machines for 5 or 7 years, with a cumulative annual output of more than 300 million units."

"An agreement must be signed by January next year to advance funds and help resolve the debt restructuring of Little Duck Electric Appliances."

"With these restrictions, only you can participate in the bidding, and the transaction can be completed at the reserve price. Other companies are not eligible."

Wang Junshan nodded: "I see."

In fact, he already knew about this process; Cui Qian had arranged it all along.

But Wang Junshan couldn't bring it up.

We can only get the other party to bring it up, and then we'll have to cooperate on future technologies!

"Moreover, the whole process usually takes two years."

"Even with local governments accelerating the process and government and enterprises working together, it will still take three to four months."

Mayor Zhao continued, "However, if we accelerate the process and convert it into commercial and residential land, two major problems will arise."

"The first problem is that once the land is converted into commercial and residential land, if you want to continue production at the washing machine factory for another seven years, environmental protection will be an issue. The Environmental Protection Bureau will come to investigate."

"Of course, although the Little Duck Factory is located in the city center, it is in the eastern suburbs, surrounded by cornfields and factories. Continuing production is not a big problem, but whether there will be any hidden dangers in the future is hard to say."

Wang Junshan understood the subtext.

Well, with this term in office, there shouldn't be any major problems.

This project was spearheaded by Mayor Zhao and the State-owned Assets Supervision and Administration Commission to save ducklings, alleviate local financial pressure, and is located in the eastern suburbs.

Who's going to investigate? Isn't this just asking for trouble?

But once a new administration takes office, it's hard to say what their attitude will be.

It all depends on Wang Junshan's actions.

"When soldiers come, we'll block them; when water comes, we'll dam it." Wang Junshan was full of confidence.

Even if there is a change of leadership, it will be several years from now.

By then, future technologies will have already become very advanced.

The other party has just taken office and needs to achieve political results, so he needs Wang Junshan to invest in more projects in Jeju.

Naturally, they wouldn't interfere with the continued production at the duckling factory.

"It seems you're confident, that's good," Mayor Zhao said with a smile.

"The second major issue is that idle commercial and residential land that has not been developed for two years can be reclaimed without compensation."

“Once this 300-acre factory is converted into commercial and residential land, and you successfully bid for it, if you continue production for more than two years, it may be considered idle land and reclaimed.”

"It's still a big problem."

Wang Junshan's expression turned serious.

I underestimated things before.

The 300-acre industrial park will be converted into commercial and residential land for continued production, and then redeveloped in seven years...

In the first seven years, the factory's 300 acres of production capacity were fully utilized.

Seven years later, the land was demolished and developed into residential housing, allowing people to reap the full benefits of the real estate boom.

But Wang Junshan can't have all the benefits.

It can be recouped in two years without development; it's impossible to drag it out for seven years.

If development is to begin within two years, even if the land use change process takes two years, and the land is acquired through judicial auction, construction will be restricted for another two years.

In other words, construction must begin within four years!
If the process started in early 2009, the auction would have been successfully completed in early 2011.

Construction had to start in early 2013, meaning that in 2012, work had to be stopped, the factory moved, and demolitions carried out!
It was almost completed in 2015.

But back then, housing prices weren't high. Could we just hold onto them and wait until they were expensive in 2017-2018 before selling?

Holding onto the stock for two or three years?
This is unrealistic. Everything is in chaos!

"Mayor, what should we do? It will take time for the duck farm to turn a profit. It stopped operating in 2012, and there isn't enough time."

Mayor Zhao chuckled:
"Then we'll have to do some compliance procedures."

"For example, in order to ensure a smooth transition of the city's home appliance industry and maintain social and employment stability, the state approved the phased development of this project."

"Phase I covers 100 mu (approximately 6.7 hectares) and is located in a less important factory area. Phase II covers 200 mu (approximately 13.3 hectares)."

“If we expedite the process, the land can be changed to commercial and residential use by the end of 2009, and the auction will end in early 2010, allowing you to acquire 300 acres of land.”

"Construction must begin within two years, that is, at the beginning of 2012."

"Similarly, in order to ensure a smooth transition and stable employment, the state has approved giving you an additional two years to build the new industrial park and relocate the production lines."

"Then Phase 1 can start construction in early 2014. Phase 2 can continue production."

"The second phase has more production lines, which is also to ensure production and employment... and considering that you have invested a lot to solve the historical debt problem of Little Duck, and invested a lot in the development of the first phase, and are under pressure in cash flow, the second phase can wait until the first phase is completed before the end of 2017."

"By then, your new industrial park will be fully completed, and you can move all your factories there without affecting production."

"During the years that the second phase of land was idle, it was not considered idle land because of reasons such as maintaining production, protecting employment, resolving debts, and restructuring assets, and therefore it will not be reclaimed."

“These can all be written into the contract and approved by the government, so they are not illegal.”

Wang Junshan smiled!
pass!

That completes the process!

Future Technology left the land idle, delaying development until 2014 and 2017. It's bound to fail, and the local government will reclaim it without compensation.

However, in order to ensure a smooth transition and maintain production and employment, the project was approved to start in two phases in 2014 and 2017, which made things more stable.

In early 2014, the first phase of construction, covering 100 mu, began. The construction period was three years. Only 20 mu were developed initially, while the remaining 80 mu continued production.

In 2016, the first phase of development was accelerated, and a new industrial park was also built.

The first phase was completed in 2017, and the property prices were already very high, so we're selling it slowly.

The new industrial park has also been fully completed.

The second phase of the 200-acre factory was relocated to a new industrial park, and the second phase of residential construction began. In 2018, the highest price was achieved, and all of the units were sold.

That would be perfect.

The 300-acre factory's production capacity can be maximized, and housing prices will be delayed until the second half of 2017-2018 when they peak, and the real estate dividends will be completely exhausted.

It all depends on how it's implemented.

"Of course, the auction will not take place for a year, which is a great risk for you. You will need to advance 6 million yuan in advance."

Mayor Zhao spoke again: "As a guarantee, this 6 million is considered a loan you made to the Jeju State-owned Assets Supervision and Administration Commission. As compensation, we will conduct a judicial auction within two years, and the proceeds will be used first to repay your loan. Any surplus funds will be given to you as 'investment rewards' or 'industrial support funds'! All of this is written into the contract!"

This year, the price of commercial and residential land in Xiaoya is 200 million yuan per mu.

If we wait until early the year after next to auction it, the price will be 250 million yuan per mu, which is 7.5 million yuan!

The extra 1.5 million yuan was partly loan interest and partly "investment rewards" or "industrial support funds"!
To put it bluntly, no matter how much Wang Junshan bids for 300 acres of land, he'll come back to his original investment after a while.

After detailed communication, both parties reached a consensus:
Future Technology lent 600 million yuan to the Jeju State-owned Assets Supervision and Administration Commission for the debt restructuring of Little Duck Electric Appliances, to resolve Little Duck Electric Appliances' liabilities, redeem its core assets, and repay employee claims.

Within two years, the Jeju State-owned Assets Supervision and Administration Commission will transfer 300 mu of commercial and residential land through a change of land use, which will be used to prioritize the repayment of principal and interest loans of Future Technology, and provide certain industrial support funds!

Future Technology will acquire Little Duck Electric Appliances at zero cost and with zero assets, including the 300-acre main factory, the Little Duck brand, equipment, production lines, etc., but will not assume any debts, which will be settled by the State-owned Assets Supervision and Administration Commission and Little Duck Group.

Future Technology should resume work and production as soon as possible, and fully revitalize Little Duck Appliances through resources such as Vipshop.

We guarantee continuous production for seven years, with an annual output of over 500,000 washing machines!

……

"That's the general direction from Chairman Wang. As for the details of the debt restructuring, we'll contact the banks and other creditors to communicate, negotiate, and devise a perfect solution."

Mayor Zhao was in high spirits. Wang Junshan was willing to take over and invest 6 million yuan, which revitalized the entire Little Duck Electric Appliances business.

When it's time to change it to commercial and residential land, go through the judicial auction process, and then have Wang Junshan buy it again, and then the money will be returned to Wang Junshan.

Perfect solution!

With future technology and Vipshop, Little Duck washing machines truly have a chance to rise again, and even return to their peak.

Jeju Island has finally solved a long-standing problem!
The most crucial aspects are debt restructuring and asset redemption.

This includes 300 mu of industrial land mortgaged to ICBC.

The 12-square-meter factory building was mortgaged to the Agricultural Bank of China.

The equipment was mortgaged to China Construction Bank.

Settlement of 1.8 million yuan in debt owed to employees.

The first few items can be discounted.

For example, if a principal of 280 million yuan and interest plus overdue penalties are owed to the Industrial and Commercial Bank of China (ICBC), through local and ICBC-related efforts, the interest and penalties might be waived, and the 470 million yuan principal and interest could be repaid for 300 million yuan.

However, the 180 million yuan in debt owed to employees must be paid in full.

This is the foundation for solving everything.

Wang Junshan was clear-headed: he would not get involved until the debt restructuring was resolved.

Once all parties reached a satisfactory agreement, Wang Junshan lent 6 million yuan to the State-owned Assets Supervision and Administration Commission to repay the debt.

At that time, Wang Junshan will acquire a clean and debt-free Little Duck Electric Appliances for zero yuan, and lead Little Duck to a phoenix-like rebirth and a new era of glory.

The 6 million yuan expenditure was subsequently converted into 300 mu of commercial land through land transactions.

"No problem, but there's one more important issue!" Wang Junshan changed the subject:
"Sweet's problem!"

"The relationship between Little Duck Electric Appliances and Sweet must be clearly resolved, and the previous restructuring cooperation must be completely terminated. The brand must also be fully reclaimed!"

"This is the premise of cooperation!"

Wang Junshan's words were beyond question.

If this issue isn't resolved, everything else is nonsense.

"Don't worry, Jeju Island has already taken action. The court summons has been received. The trial will be held in two days!"

Wang Junshan was full of surprise: "So fast?"

"Of course, without dealing with this capitalist rogue, Sweet, everything else is out of the question. We began a series of preparations before even considering bringing in your investment!"

"Then I can't wait." Wang Junshan breathed a sigh of relief.

Mayor Zhao is decisive and efficient; he is indeed a man who gets things done!

The next day, many media outlets began to focus their coverage on the news:

[Swit acquired Little Duck Appliances with zero capital and zero assets, but failed to fulfill any promises, make any investments, or assume any liabilities. Instead, it drained Little Duck's many valuable assets.]

[With the introduction of Swit for restructuring, Little Duck washing machine sales plummeted, resulting in over 5 million yuan in new debt.]

[Sweet Capital is a rogue entity; they've ruined Little Duck, refusing to honor their promises and leading it to ruin!]

[Swit is on the verge of bankruptcy and unable to fulfill its restructuring agreement. The Jeju State Assets Supervision and Administration Commission has announced a complete halt to the restructuring and has sued Sweet for illegally misappropriating 300 million won and incurring an additional 500 million won in debt!]

(End of this chapter)