Reborn Tycoon Rise

"Is it possible that Xu Sheng wants to develop this project alone?" Chen Songqing didn't seem to care about what Xu Zhi said, but said with a smile.

Xu Zhi nodded and said, "Does Chen Sheng think that Hutchison Whampoa doesn't have the strength?"

"Haha, of course I know that Hutchison Whampoa has the strength, not to mention that Xu Sheng himself has enough financial resources to complete this project." Chen Songqing said with a smile: "But in Xiangjiang now, everyone makes quick money and can quickly Profit is the most important thing. Hutchison Whampoa raised HK$3 billion in the stock market some time ago to invest overseas. Now if it undertakes this project again, the debt ratio will be extremely heavy.

Cooperation with us is very simple. As long as we sign the agreement, Land and Caring will borrow money from the bank in advance, part of it will be given to Hutchison Whampoa as a deposit, and the other part will be used as the start-up capital of the project. As long as the project can be sold off-plan, all the funds will be All will flow back, and all three of us will benefit, and in this process, Hutchison Whampoa will be the one that profits the most.

Xu Sheng, should I get all the profits from my company's high-debt operation, or should I get most of it by doing nothing? I, Xu Sheng, should be very clear about the pros and cons.

What's more, Xu Sheng's vision is much better than that of the rest of us. He is also a powerful influencer in the international market. He can use the first-come-first-served funds to invest and make profits internationally. This is completely killing two birds with one stone. "

"Chen Sheng is so thoughtful, I have to think about it carefully." Xu Zhi smiled and said, what Chen Songqing said does make sense.

In Xiangjiang, it is not impossible to develop your own land and property. In fact, although it is the most profitable, it is the slowest in terms of efficiency, because the law in Xiangjiang stipulates that the sale of uncompleted properties must be eight months before the cap of the building is capped. This is true for residential buildings. It doesn't have much impact, because the houses are built very quickly.

But for large office buildings, the construction time may be as long as 2-4 years. This process will accumulate too much money, which is not cost-effective in terms of return on investment.

In the late 1970s, Hopewell Industrial was the strongest among the five real estate giants. However, too much money was invested in the construction of Hopewell Center, the tallest building in Hong Kong, and it lost prime time for development.

Therefore, in this era, many companies that own land will quickly sell the land in their hands and then use the funds to develop and grow, instead of guarding a piece of land and eating alone.

The fundamental reason for this approach is to give up part of the profits and a lot of risks, and at the same time obtain funds to develop other projects. It is a relatively stable investment method. The takeover party uses bank leverage to accept the project at almost zero cost, but bears a huge burden. risks of.

The risk is relative. As long as you have confidence in housing prices, the risk does not exist. Most of the four major families in later generations used this method to obtain land from British companies during this period, thus gaining development opportunities.

Of course, these cooperations are aimed at medium-sized companies. If the company is large enough, not heavily in debt, and has confidence in housing prices, and there are not many quick profit-making projects, it is also suitable for you to develop large-scale properties yourself, such as in 1985. Later, Li Jiacheng's assets exceeded tens of billions of Hong Kong dollars. Such a large company could no longer speculate like a small company. The development of the four walled villages became the most profitable project.

Some time ago, Hutchison Whampoa Company publicly attracted HK$3 billion in funds from the stock market through Standard Chartered Bank, which is almost half of Hutchison Whampoa's market value. Chen Songqing must have believed that Hutchison Whampoa has large-scale project investments overseas and needs to mobilize funds from Hong Kong, and also It was judged that Hutchison Whampoa was heavily in debt at the moment and would not develop large-scale projects on its own, so it came up with the idea of ​​developing the Hilton Hotel site together with Land.

Chen Songqing smiled and said: "Okay, I hope to get good news from Chen Sheng as soon as possible."

…

A week later, Xu Zhi summoned Wang Liming, Ma Shimin, and Yuan Tianfan to hold a small meeting.

"You have read these materials, what do you think?" Xu Zhi asked at the main conference table.

Ma Shimin was the first to say: "Chen Songqing is actually right. The management of Hilton Hotel is not in our hands. Although we can make profits every year, it is far behind the development of large office buildings.

However, if we were responsible for the development ourselves, it would put a lot of pressure on the company's funds. "

Xu Zhi asked: "You mean you can consider selling the entire hotel property directly to Land and Carnegie Group?"

"Yes, although the Hilton Hotel is now in a prime location, if we want to get the best profits, we must first take back the management rights from the hotel, dissolve the hotel, and then demolish the building and build a high-rise. Rather than having such trouble, it is better for us to obtain A sum of funds can be used to build buildings elsewhere. The Hong Kong government has been reclaiming land over the years, so it is much more convenient to participate in the auction." Ma Shimin said succinctly.

"If we can sell it at a high price, I will not object in principle." Xu Zhi nodded in agreement. He has always required the company to hold the gold properties in Central for a long time. However, Ma Shimin also makes sense on this point. After all, The current profitability of hotel properties is too low, and it will take a very long time to take them back and then demolish and rebuild them. And there is no property in this world that will never sell, it’s just whether the time and price are right.

If we can sell it at a high price now, when the real estate crisis hits in 1983, the Hong Kong government will still launch a large number of prime-located land. Although it is difficult to come across land that can match the location of the Hilton Hotel, in terms of profits, arbitrage at high prices now will If the land price is purchased in the future, it will always be much more cost-effective.

Now if you develop the entire project yourself, you will have to negotiate with an international hotel like Hilton, design and recruit workers for the building, and advance funds for construction. If you put it all together, you will have to wait until at least 1983 before the off-plan properties can be sold. At that time, the real estate crisis It has already been established that even in the Central area, house prices will fall by 30 to 40%, not to mention the Hong Kong dollar will plummet, and whoever develops this project will lose money.

Now Land Land is no longer threatened by Chinese capital because of its equity. At the same time, it is gradually breaking away from the control of Jardine and has begun to enter a stage of crazy expansion. Although there are many differences from the original history, for example, Hong Kong Electric has long been owned by Xu Zhi acquisition.

But Land will not save some money by not acquiring Hong Kong Electric. As long as it has money and collateral, Land will desperately use bank financing to expand. It is mid-81, when real estate prices are at their highest, and it will sell the Hilton Hotel. It’s enough to saddle Land with billions of Hong Kong dollars in debt.

Xu Zhi then asked: "What does Bank of East Asia say?"

“For the Miramar Hotel project, Land and Carnegie intend to loan us HK$2.5 billion, which Bank of East Asia can independently bear.

But if Hutchison Whampoa agrees to sell the Hilton hotel property, then Land and Carnegie will apply for another loan of HK$3 billion, which is already beyond the capacity of our Bank of East Asia. However, I can cooperate with Standard Chartered Bank to jointly lend. "Yuan Tianfan was the first to report. He still hopes that the Bank of East Asia can win these two large-scale projects this time, so that the increased deposits due to the advertising effect during this period will also find an outlet at once.

However, the funds for the two loans are too much, so we can only seek cooperation from other banks. Real estate companies can form joint consortiums to jointly develop large-scale projects, and banks can naturally cooperate with each other to form banking syndicates, which actually shares risks. measure.

Xu Zhi shook his head and refused: "The Bank of East Asia can directly lend money to the Miramar Hotel project, but the Hilton Hotel project cannot be borrowed from the Bank of East Asia. I am the major shareholder of Hutchison Whampoa and the boss of the Bank of East Asia. Although the bank's funds are loans It was given to Land and Carin, but part of it would go to Hutchison Whampoa. Although it did not violate banking laws, if something goes wrong in the future, it is likely to be suspected of insider trading. This kind of thing should be avoided if possible."