Chapter 122 - Cooperation with HSBC
The condition of offering no less than 4 Hong Kong dollars per share was actually a relatively favorable situation for Lin Haoran.
Although there were indeed some sell orders in the market below 4 Hong Kong dollars, their total volume was limited — only three to four million shares, with an average price hovering between 3.7 and 3.8 Hong Kong dollars.
As for sell orders below 3.5 Hong Kong dollars, they were extremely rare, barely more than one million shares.
Thus, for Lin Haoran, the slight price difference would not incur much additional cost, while a stable acquisition at 4 Hong Kong dollars per share would allow him to effectively advance his privatization plan for the company.
Currently, he personally controlled about 49.9% of Qingzhou Cement Company's shares.
Adding the combined 24.1% from the eight shareholders he was set to acquire, his total holdings would jump to 74%, establishing an absolute controlling advantage.
The remaining 26% of shares on the market — about 13 million shares — would no longer pose a major obstacle to the privatization of the company.
With this decision, all disputes and conflicts quickly dissipated.
The following morning, Lin Haoran arrived at Qingzhou Cement Company and officially announced to the public that he had reached an agreement with all major shareholders to acquire 12.05 million shares at 4 Hong Kong dollars each, totaling 48.2 million Hong Kong dollars.
At the same time, Lin Haoran announced a plan to privatize Qingzhou Cement Company through a buyback at 4 Hong Kong dollars per share.
The company had officially applied to the Hong Kong Stock Exchange to suspend trading of its shares.
Once the suspension was approved, shareholders would no longer be able to trade Qingzhou Cement shares through the secondary market.
Shortly after the announcement, sell orders for Qingzhou Cement below 4 Hong Kong dollars disappeared without a trace.
Previously, Lin Haoran had sold 11.86 million shares, receiving over 59 million Hong Kong dollars.
Now, he was buying 12.05 million shares — even more than he had sold — but spending only 48.2 million Hong Kong dollars.
Before that transaction, his available funds were almost exhausted.
Through this series of maneuvers, not only had his shareholding increased from 68.4% to 74%,
but he also still had about 1 million Hong Kong dollars in available cash.
Ironically, the unexpected report filed by the five British shareholders had actually benefited him greatly.
Although he had been forced to launch the privatization process earlier than planned, the remaining 13 million shares, even priced at 4 Hong Kong dollars each, would only require about 52 million Hong Kong dollars.
Although his available cash was limited to about 1 million Hong Kong dollars — and obviously he could not pay 52 million immediately — he had already decided to entrust the privatization process to Wardley Company, a subsidiary of HSBC, thus greatly alleviating his financial and operational burden.
Wardley Company, being a wholly owned subsidiary of HSBC, had extensive experience in financial services, including securities underwriting, corporate consulting, mergers and acquisitions, financial investments, and medium-to-long-term loans.
Through Wardley's professional operation, Lin Haoran would only need to pay a service fee and could easily resolve both the acquisition financing and loan issues, smoothing the way for privatization.
Privatizing a publicly listed company was a complex and meticulous financial project.
It involved acquiring all public shareholders' shares and delisting the company from the stock exchange.
This required issuing a comprehensive offer to all minority shareholders, or negotiating direct share transfers with key holders, followed by applying to suspend the company's stock from public trading.
Faced with the 13 million shares still scattered among retail investors, it would have been an exhausting and painstaking project if Lin Haoran's Huanyu Investment Company had attempted it alone.
Although Huanyu Investment and its core members like Su Zhixue were skilled in secondary market operations, they were somewhat lacking when it came to highly specialized privatization work.
Thus, handing the project over to a professional institution like Wardley Company was a wise move, ensuring efficiency and smooth execution.
In the afternoon, at 3 PM, Lin Haoran arrived at HSBC's headquarters to visit HSBC Executive Shen Bi.
Compared to last time, Lin Haoran clearly sensed that Shen Bi's attitude had become noticeably more enthusiastic.
"Mr. Lin, you've certainly been a star in Hong Kong's business world lately. You've been making quite a splash," Shen Bi said with a teasing smile as he shook Lin Haoran's hand.
Lin Haoran shook his head modestly and replied with a wry smile, "Not at all. I never intended to cause a stir.
It's just that sometimes life doesn't allow you to stay low-key."
After taking seats in Shen Bi's spacious, brightly lit office, an assistant quickly brought them freshly brewed coffee.
Shen Bi got straight to the point:
"Mr. Lin, your visit today must involve important business?"
Lin Haoran nodded and was direct:
"Indeed.
I understand that Wardley Company under HSBC is particularly professional in financial services, especially in securities underwriting, corporate consulting, and mergers and acquisitions.
Since I have announced the privatization of Qingzhou Cement Company, I would like to entrust this important task to Wardley."
Hearing it was business, Shen Bi's enthusiasm grew stronger.
Although it wouldn't be a huge profit, it was still good business —
and another opportunity to deepen HSBC's relationship with this promising young entrepreneur.
The events of the past few months had convinced Shen Bi that Lin Haoran's future was full of potential.
HSBC's ultimate goal was to make money, and collaborating with a rising star like Lin Haoran would only help them accelerate.
Such partners were highly desirable.
"Our Wardley Company is the best in securities underwriting, corporate consulting, corporate management, and mergers and acquisitions.
Mr. Lin, you have chosen wisely.
Wardley will not disappoint you," Shen Bi said with a broad smile.
"Also, Mr. Shen Bi, you probably know that I recently purchased a batch of crude oil for 60 million US dollars," Lin Haoran added.
The transaction had been handled through HSBC, and the money was transferred to Saudi Aramco.
Such a large transfer could hardly have escaped Shen Bi's notice.
Bank privacy policies, in Lin Haoran's view, were largely nominal.
As soon as he checked on his fund transfer last time, Shen Bi had found out almost immediately and arranged a meeting.
Clearly, any significant transaction would be quickly reported internally at HSBC.
"Congratulations, Mr. Lin!
Today, oil prices have just climbed to 19.65 US dollars per barrel.
In a few more days, prices could easily surpass 20 dollars," Shen Bi said with admiration.
Back in November, no one could have predicted that a full-blown oil crisis would erupt.
And even those who anticipated trouble didn't know Iran's oil exports would be interrupted for so long.
From early December to now at the end of the month, Iran's domestic conflict had only worsened,
and oil supply had not resumed.
"I've been watching the situation in Iran closely for nearly a year," Lin Haoran said with a smile,
"and combining that with my research into the 1973 oil crisis, it led me to make the decision to invest heavily just before the crisis hit.
You could say I was lucky."
"I heard that oil is in such short supply now that even major companies can't buy enough.
You must be making a fortune.
Do you think oil prices will keep rising?" Shen Bi asked curiously.
"Once an oil crisis breaks out, it doesn't end quickly," Lin Haoran analyzed calmly.
"Even if Iran resumes exports, the big oil tycoons who've tasted the profits from soaring prices won't let prices fall easily."
"Remember the first oil crisis?
Prices jumped from 2.7 dollars per barrel to a peak of 13 dollars.
And even after the crisis ended, oil prices never fell below 10 dollars again."
"Once prices rise, they rarely return to previous levels.
Since prices have only risen from about 13 dollars to 19.65 dollars so far,
not even doubling yet,
there's no way the oil companies will let this rally stop now."
Shen Bi couldn't help clapping.
"Mr. Lin, your analysis is brilliant.
No wonder you made such a fortune!"
"Just lucky," Lin Haoran said modestly.
"As for privatization and the loan, leave everything to us," Shen Bi said warmly.
"We're the best, and our fees are reasonable.
I'll immediately call over the head of Wardley Company to discuss the details with you."
Privatization and the loan represented two separate deals.
For HSBC, this wasn't a small business opportunity.
Such acquisition battles, like the one for Wharf Holdings involving Bao Yugang,
happened perhaps once every few years.
That afternoon, Lin Haoran finalized his agreement with the General Manager of Wardley Company, signing a cooperation deal under Shen Bi's witness.
First, Wardley Company would handle all privatization work.
Once Qingzhou Cement delisted, shareholders would no longer trade shares on the open market —
they could only sell through Wardley.
Second, HSBC would loan Lin Haoran 50 million Hong Kong dollars.
Notably, this loan required no collateral —
it was essentially a credit loan.
In Shen Bi's eyes, Lin Haoran's net worth far exceeded 50 million Hong Kong dollars.
This showed how highly Shen Bi now regarded this rising business star.
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