Chapter 122: Cooperation with HSBC
The acquisition condition that the purchase price could not be lower than HK$4 per share was actually relatively favorable for Lin Haoran.
Although there were indeed some sell orders on the market below HK$4, their total volume was limited to only three to four million shares, with an average price hovering around HK$3.7 to HK$3.8.
As for sell orders below HK$3.5, they were even rarer, totaling only a little over one million shares.
Therefore, for Lin Haoran, this small price difference would not result in much additional expenditure. Instead, the stable purchase price of HK$4 per share would effectively facilitate his plan to privatize the company.
At present, he personally controlled about 49.9% of Qingzhou Yingni's shares. Together with the 24.1% held by the eight shareholders he planned to acquire from, once the acquisition was completed, his stake would jump to 74%, giving him absolute control.
The remaining 26% of shares on the market, approximately 13 million shares, would no longer be the main obstacle to achieving the company's privatization.
With this decision settled, the disputes and disagreements also came to an end.
The next morning, Lin Haoran arrived at Qingzhou Yingni and officially announced that he had reached agreements with all of the company's major shareholders. He would acquire a total of 12.05 million Qingzhou Yingni shares from eight shareholders at HK$4 per share, involving a total transaction value of HK$48.2 million.
At the same time, Lin Haoran decided to carry out a privatization buyback of Qingzhou Yingni at HK$4 per share. In addition, the company officially began preparations to withdraw from the stock exchange and had already applied to the Hong Kong Stock Exchange to suspend trading of its shares.
Once the application was approved, investors would no longer be able to trade the stock on the secondary market.
Not long after the announcement, all sell orders below HK$4 disappeared from the market.
Previously, he had sold 11.86 million shares of Qingzhou Yingni, ultimately receiving more than HK$59 million.
This time, however, he bought back 12.05 million shares—more than he had sold before—yet only needed to spend HK$48.2 million.
Before that transaction, his available funds had essentially been depleted.
But after this round-trip of selling and buying, not only had his holdings increased—from 68.4% to the current 74%—
he still had HK$1 million in available cash remaining.
The unexpected complaint letter from those five British shareholders had actually brought him considerable benefits.
Although it forced him to begin the privatization of Qingzhou Yingni ahead of schedule, the remaining 13 million shares on the market would require only HK$52 million at HK$4 per share.
Although he was currently short of funds, with only about HK$1 million left and obviously unable to produce HK$52 million, he had already decided to entrust the privatization to Wardley Company, a subsidiary of HSBC. This would greatly reduce both his financial and operational burdens.
As a wholly owned subsidiary of HSBC, Wardley possessed extensive experience in financial services, covering securities underwriting, corporate advisory, mergers and acquisitions, financial investment, and medium- to long-term lending.
Through Wardley's professional services, Lin Haoran would only need to pay a service fee to easily resolve both the acquisition funding and loan issues, making the road to privatization smooth and unobstructed.
The privatization of a listed company is a complex and meticulous financial undertaking aimed at removing the company from public ownership by having major shareholders acquire the shares of minority shareholders, transforming it into a privately owned company and revoking its listed status.
This process requires making a general offer to all public shareholders or reaching share transfer agreements with key shareholders while simultaneously applying to suspend trading of the company's shares on the stock exchange.
Faced with the 13 million Qingzhou Yingni shares scattered among retail investors, if Lin Haoran's Universal Investment handled the matter alone, it would undoubtedly be an enormous undertaking requiring significant time and effort. Although Universal Investment and its core members, such as Su Zhixue, were highly skilled in secondary market operations, they were somewhat out of their depth when it came to the highly specialized task of privatization. Therefore, entrusting the matter to a professional institution like Wardley was undoubtedly the wise choice, ensuring an efficient and smooth privatization process.
Professional matters should be handled by professionals, and Wardley was exactly that kind of professional company. There could be no more suitable choice.
At three o'clock that afternoon, Lin Haoran arrived at HSBC headquarters to visit HSBC Chairmana Michael Sandberg.
Compared with their previous meeting, Lin Haoran clearly felt that Sandberg's attitude toward him had changed considerably and had become much warmer.
"Mr. Lin, you've become quite the star of Hong Kong's business world lately. You've certainly made quite a splash," Sandberg said with a smile as he shook Lin Haoran's hand, his tone carrying a hint of teasing.
Lin Haoran gently shook his head and replied with a wry smile, "Not at all. I never intended to attract attention. It's just that fate has a way of playing tricks, and there are always people who don't want to see me live in peace."
The two sat down in Sandberg's spacious and brightly lit office, where an assistant promptly served them hot coffee.
Sandberg got straight to the point. "Mr. Lin, I assume you've come today because you have something important to discuss?"
Lin Haoran nodded and spoke frankly. "Indeed. I understand that Wardley, HSBC's subsidiary, is particularly professional in financial services, especially securities underwriting, corporate advisory, and mergers and acquisitions. Since I've announced the privatization of Qingzhou Yingni, I'd like to entrust this important task to Wardley."
Hearing that it was business, Sandberg became even more enthusiastic. Although the profits would not be enormous, it was still another piece of business.
At the same time, it was also an opportunity for HSBC to deepen its cooperation with the young businessman Lin Haoran.
Everything that had happened over the past two or three months had convinced Sandberg that Lin Haoran had limitless potential.
HSBC's ultimate goal was to make money, and cooperating with promising young people like Lin Haoran would obviously help the bank grow faster. The more partners like him, the better.
"Our Wardley company is the most professional in securities underwriting, corporate advisory, corporate management, and mergers and acquisitions. Mr. Lin truly has a discerning eye. Wardley will certainly live up to your trust," Sandberg said with a smile.
"Also, Mr. Sandberg should know that I purchased a batch of oil. It cost me US$60 million, so I currently don't have the funds available to acquire the shares. Therefore, the funds needed for the privatization of Qingzhou Yingni can only come in the form of a loan," Lin Haoran continued.
The US$60 million had been transferred through HSBC, and the recipient was the famous oil company Saudi Aramco.
With such a large transfer, Lin Haoran simply didn't believe that Sandberg, as HSBC's chairman, would fail to notice it.
As far as Lin Haoran was concerned, all that talk about banks maintaining strict customer confidentiality was merely something they said to the public.
Just like last time, he had merely checked whether funds had arrived in his account, and before long Sandberg already knew about it and invited him to meet.
It was easy to imagine that major transactions at HSBC would certainly be promptly reported to senior management.
There was no helping it. Once you deposited your money in a bank, it was inevitable that your transaction records would be known internally.
"Congratulations, Mr. Lin. Oil prices just reached US$19.65 per barrel today. In a few more days, they might even break through US$20 per barrel. You've made another fortune!" Sandberg said, now genuinely admiring Lin Haoran's boldness.
Back in November, who could have imagined that the oil crisis would really happen?
And even if people had guessed that an oil crisis was coming, no one knew how long Iran would stop exporting oil.
From early December until the end of the month, not only had Iran's oil supply failed to return to normal, but the civil war had grown increasingly intense.
"I'd been paying attention to developments in Iran for nearly a year. Combined with what happened during the 1973 oil crisis, I only made up my mind to do this deal one month before the crisis began. I suppose I was lucky," Lin Haoran said with a smile.
"I've heard that because everyone is scrambling for oil, many oil companies can't even buy any. Your oil should be very easy to sell now. You've already made quite a profit. Do you think oil prices will continue to rise?" Sandberg asked curiously.
"Once an oil crisis begins, it won't end in the short term. Even if Iran resumes exports, those oil magnates have already enjoyed the enormous profits brought by rising oil prices. There's no way they'd allow prices to stop climbing.
Mr. Sandberg, do you remember the first oil crisis? Crude oil prices rose from US$2.70 per barrel to as high as US$13. Even after the crisis ended, prices never fell below US$10 again.
Once prices have gone up, how could the oil companies willingly return to the old levels? Right now, oil prices have risen from around US$13 in November to US$19.65 today—not even double yet. Those oil companies won't simply allow prices to stop rising," Lin Haoran explained briefly.
Sandberg couldn't help applauding. "Mr. Lin, that's an excellent analysis. No wonder you were able to make money from it!"
"I was just lucky," Lin Haoran replied modestly.
"As for the privatization and the loan, you can leave everything to us. Rest assured, we're the professionals, and our fees are reasonable. I'll call Wardley's general manager over immediately so he can discuss the details with you," Sandberg said with a smile.
The privatization and the loan already represented two separate pieces of business.
Although not enormous for HSBC, they were certainly not insignificant either. During the Wharf acquisition battle, Bao Yugang had entrusted Wardley with the role of financial adviser, which also involved substantial loans from HSBC, allowing Wardley to earn considerable profits.
However, acquisition battles of that scale might not occur even once every several years in Hong Kong.
That very afternoon, Lin Haoran reached a cooperation agreement with Wardley's general manager, and under Sandberg's witness, both parties signed the cooperation agreement.
First, all privatization work for Qingzhou Yingni would be entrusted to Wardley. After Qingzhou Yingni was delisted, shareholders would no longer be able to trade the stock on the securities market and could only sell through Wardley.
Second, HSBC would provide Lin Haoran with a loan of HK$50 million.
It is worth mentioning that this loan from HSBC required no collateral whatsoever—it was essentially an unsecured credit loan.
In Sandberg's view, Lin Haoran's net worth was now far greater than HK$50 million.
This alone showed that the newly rising star of the business world had already come to occupy an extremely important position in Sandberg's eyes.
(End of Chapter)
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