Chapter 310 One stone stirs up a thousand waves
When you know that there are no risks in the future and you can still make a lot of money, but your funds are limited, the most important requirement is that the bank loan limit must be high enough.
For this reason, even if you make some other concessions, such as transaction price or interest, as long as these two are not outrageous.
In fact, many people who do not know the future are extremely dependent on banks for business. No matter how much debt they owe, it is not a problem.
The shipping industry has a higher demand for bank funds than the real estate industry. If it wants to develop rapidly, it must rely on banks. This is true for several shipping kings in Hong Kong.
In the next few days, Zheng Yuhua held many more talks with Mitsui Shipbuilding Co., Ltd., and Yang Wendong also learned about the situation in a timely manner.
Finally, on January 12, the two parties reached a memorandum of understanding on cooperation. Changxing Shipping will purchase 7 large oil tankers and 3 bulk carriers from Mitsui Shipbuilding Co., Ltd., 10 ships with a total displacement of 610,000 tons. The transaction price was US$49.2 million.
62% of the funds were jointly loaned by Mitsui Banking Corporation and Sumitomo Bank.
However, this is only a memorandum. It is a legal obligation agreement that restricts both parties from keeping confidential relevant business negotiations before formally signing a cooperation contract;
Many large-scale acquisitions and even state negotiations will have Such restrictions, such as product minimum price, after-sales service and other requirements, are also very important business information for the manufacturer. If the final cooperation is not negotiated, the buyer cannot disclose it to the outside world.
Ichiro Takizawa signed the big order, with a happy face on his face, and said to Yang Wendong: "Mr. Yang, our cooperation this time is also a huge project in the Japanese shipbuilding industry. When the contract is signed, you must come in person. "
"Okay." Yang Wendong nodded, and then said: "This cooperation is also good. This is the first time for both of us to cooperate. I hope that we can maintain such a relationship in the future.”
Having a good relationship with a top Japanese consortium will definitely be of great benefit to him, and Japan itself will be a good partner for him in the future. Key markets for each industry, such as culture, toys, electronic products, etc.
There is buying and selling, whether it is a country or a company, this is the best way to maintain relationships.
Takizawa Ichiro added: "No problem, we can make it for you whatever type of ship you need in the future. Even a 200,000-ton displacement oil tanker is not a problem."
"That's good." Yang Wendong paused and asked: "Can you make container ships?"
"Of course." Takizawa Ichiro said: "It's just that the output is very small, because the purchased There are few customers, mainly because container ships rely on new infrastructure ports;
Currently, containers are still mainly in a few cities in Europe and the United States, and in Asia. There are relatively few such ports. Is Mr. Yang interested in container ships?”
Yang Wendong said: “There is interest, but the current infrastructure in Asia does not support my purchase of container ships.”
Without a container terminal, the efficiency of containers may not be as good as traditional freighters. After all, such a large box cannot be moved manually.
Container infrastructure has been added to terminals around the world, and terminals and ports need to be rebuilt in many places. This is a very large project.
Even in European and American countries, because the demand for manpower at container terminals is very low, this has led to many dock workers going on strike or even sabotaging, which has slowed the development of the container revolution.
Ichiro Takizawa is also an industry insider and said: "Yes, in fact, I am also optimistic about container freighters. Sooner or later, this thing will dominate the world."
"Mr. Takizawa is very knowledgeable." Yang Wendong smiled.
In fact, many knowledgeable people can see this trend. After all, some ports in Europe and the United States are already implementing this container, and its efficiency and cost control are already obvious.
It's just that the benefits of millions of water works are too great. It's difficult to move.
The next day, Yang Wendong rushed back to Hong Kong. After returning home, he also informed his family about what happened in Japan. .
This matter has not reached Hong Kong yet, but it will soon. After all, for such a big deal, the Japanese shipyard is a listed company and must be announced. And it involves banks, so it is impossible to do it absolutely. Confidentiality.
“50 million US dollars?” After hearing this, Bai Yushan and Su Yiyi didn’t know what to say.
After the meeting, Su Yiyi asked: "Wouldn't such a large amount of funds affect the entire company?"
"You think you need a lot of funds?" Yang Wendong said with a smile: "But in fact, the funds needed are very small."
Bai Yushan asked: "Is it mainly because of loans?"
Yang Wendong nodded and said: "This is one of them. The Japanese bank has promised to bear 62% of the loan, and I will also find HSBC to let them bear part of it;
In this way, I only need to bear 10% to 15% of the funds. According to this ratio, I will need to provide between 5 million and 7.5 million US dollars."
Bai Yushan asked: "Six to seven million. A lot of dollars, right?”
Yang Wendong added: "It is indeed a lot, but do you think I will pay all at once? The project has a cycle. At the beginning, I only need to pay a small deposit, and then the project will start.
When the construction reaches a certain level , if you give me some more money, a large amount of funds will have to wait until the ship is built. It will only be given after it is settled, which will be a year or two later. In the short term, only 2 million US dollars may be enough.”
This is also the charm of financial leverage. A little bit of capital can increase your capital dozens of times, whether it's real estate or shipping.
More than a dozen years later, Hong Kong tycoon Chen Songqing became even more sophisticated in this operation. Although there were some illegalities in his operation, the essence was to use the leverage principle of the financial industry.
Su Yiyi asked: "Isn't this very risky?"
Bai Yushan said: "Sister Yiyi, the risk is definitely high, but this is also normal. Hong Kong shipping companies all play this way. Just Dong Haoyun and Zhao Congyan, their own funds are far less than that of Changxing Group, but The tonnage of the ships is much larger, and they are all using loans."
"Yes, what I am playing now is just the leftover tricks of others," Yang Wendong said with a smile. "You know Pao Yugang, right? His company has been bought into by HSBC, and HSBC supports him to such an extent that I was stunned. The risk is actually greater than ours."
Hong Kong's shipping king and Real estate companies can develop so rapidly because they are bold enough, coupled with various factors of the times and the economy that has been rising, it has created such a city with a lot of business legends.
Of course, there are also failures. For example, 8 of the top ten Chinese families in Hong Kong in the previous life only started to rely on real estate after 1968. Many real estate companies before 1966 will not succeed in the next one. During the real estate crisis, the group was almost wiped out, and only a few such as Zheng Yutong survived.
Bai Yushan asked: "I remember that Bao Yugang was willing to rent out his captain because of his business strategy. The risk should not be high, right?"
Yang Wendong shook his head and said: "The loan ratio is too high, so everything is a risk. Even if the long-term rental model has low risk, if there is a problem with the operation, won't the risk be high?"
"Yes." Bai Yu Shan nodded and said: "But I heard Sanders said in a meeting that he is more optimistic about the future shipping market, so he dared to bet."
"Yes, I am optimistic too. "Yang Wendong smiled.
Bai Yushan asked again: "Brother Dong, don't you want HSBC to take a stake?"
Yang Wendong shook his head and said: "It won't work. I tried it before, but Sanders didn't give it. Accurate reply, I guess he thinks I’m too risky.”
One of his many operations was to transport water to alleviate drought, and the other was to plan for the future crisis in the Middle East.
But in the eyes of outsiders, this investment model is too risky. After all, there are so many old ships that will inevitably have a strong impact on normal business when they are scrapped in batches ten years later.
Even if you are just doing leasing, you have to replace old ones with new ones one by one. This is the norm.
Even if HSBC is optimistic about shipping, it still has a firm hand and chooses Bao Yugang, a long-term rental business model, instead of Dong Haoyun, a larger shipping king. On its own side, it is also a short-term rental, so HSBC Naturally, it feels unsafe.
Bai Yushan said: "It's for transporting water. To be honest, many people couldn't understand it at the beginning. It's only now that the drought is so severe that we understand. Maybe Sanders will change his mind now."< br>
"Maybe." Yang Wendong didn't pay much attention and said, "I will meet with Sanders tomorrow and try it out then."
Under normal circumstances, the Bank of Japan will only bear 50-60 % of shipping loans, and others still have to rely on Hong Kong banks. This is why Hong Kong shipping companies have to please HSBC.
Although the sale of shares will give HSBC a slight advantage, if it has the full support of HSBC. You can easily make the cake bigger, and the little you share with HSBC is not too much. The most important thing is that we can reach a better cooperative relationship with HSBC to facilitate future operations in real estate and even overseas investment.
Bai Yushan said: "Then I hope it can succeed."
"Yeah" Yang Wendong nodded.
If several other companies, including real estate, allow outsiders to invest, he will be very cautious and must consider many benefits and losses.
But shipping is different. Although he will not give up this industry in the future, by the end of the 1970s, this industry was basically no longer viable. It was possible to operate, but the competition was fierce and the profits were not much.
At that time, he paid more attention to the influence brought by ship orders.
Therefore, accepting shares can make you larger and is negotiable.
The next day, Yang Wendong came to the headquarters building of HSBC Bank:
"Mr. Sanders." Yang Wendong said with a smile.
Sanders also said: "Hello, Yang Sheng, please sit down."
After the two sat down and chatted for a while, Yang Wendong went straight to the point and informed some of the results in Japan. Got him.
After hearing this, Sanders smiled and said: "Yang Sheng is really brave to order a new ship with a tonnage of 600,000 tons at once."
Yang Wendong smiled lightly and said: "I am very optimistic about the future shipping industry, especially large tankers. Judging from the development of the global economy, the economic recovery in many places urgently needs a large amount of oil."
"Well, Oil is the lifeblood of any country's economy." Sanders nodded and said, "I am also optimistic about shipping. I am willing to support Yang Sheng."
Yang Wendong smiled and said: "Then I hope HSBC can bear 28% of the loans for these ships. What do you think of Mr. Sanders?"
"This ratio? Is it too high? More than 10 million US dollars, there is no collateral," Sanders said slowly.
Yang Wendong nodded and said: "According to the current market rate of return, as long as the operation goes smoothly, large oil tankers and bulk carriers can pay back their capital in three years, and the risk is also very low.
There is nothing you can do without a mortgage. The Japanese bank has taken away the mortgage rights, but HSBC will also receive higher interest returns. ”
In the early days, HSBC and even other banks in Hong Kong did not participate in the shipping loan business. One reason was that shipping risks were considered high, and the other reason was that new ships purchased by Hong Kong companies from Japan could not be mortgaged to Hong Kong banks. Yes, because the banks in Japan have already taken it.
After all, the Bank of Japan has taken the majority of the loan amount, and the interest is not very high, so the Hong Kong side only has it. Can accept similar unsecured loans.
Although the loan limit of banks in Hong Kong is not high, it is very important. Without it, the ship owner may need to invest several times more.
With the gradual improvement of navigation technology and the improvement of the insurance industry, risks gradually decreased, and HSBC gradually started to do this business, but the interest rate must not be low
Sanders smiled and said: "What about the five-year interest rate of 12%?"
"Isn't the interest rate a bit too high?" Yang Wendong said with a smile.
Interest rates in the 1960s were not very high, mainly because interest rates in the United States were not high and had a global impact.
The interest rate on housing loans in Hong Kong is generally around 6%, industrial and commercial loans are generally around 8%, and shipping rates are a bit higher, but generally around 10%.
Sanders said: "Although it is a bit higher, if I bear 28% of the loan amount, then Yang Sheng only needs to pay 10% himself. What does this mean to the capital chain? I don't need to Say more?
Even Dong Haoyun needs to advance more than 15% to purchase a new ship. "
Yang Wendong smiled: "I understand, but we can be considered a long-term cooperation."
The two discussed again and finally settled on the interest rate: 11.2%.
"Mr. Sanders, I wish us a happy cooperation. Yang Wendong shook hands and said.
As long as the limit given to him is high enough, he can accept a higher interest rate. The future shipping profits can easily suppress even 20% of the annual interest rate.
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However, we still need to talk about it, and it would be better if we could talk less.
Sanders also shook hands and said: "I will draft the loan agreement. After it is completed, we will meet together to confirm it."
"No problem." Yang Wendong nodded. .
Sanders said again: "Yang Sheng, although I am optimistic about your ability, you have been operating such a high-risk operation. After all, you still need to control it. Long-term and stable operation is the most perfect."
Yang Wendong said: "Compared to Global Shipping, I am much more conservative here."
Bao Yugang was able to surpass so many century-old shipping families in 20 years. His ability is indeed strong, but high-leverage operations are also inevitable.
Yang Wendong also wants to play that way, but currently no bank is willing to help him.
Sanders shook his head and said: "That's different. Bao Yugang adopts a long-term rental model. Even if there is a problem, the leasing company will take care of it."
"Yes, but I Bian will not adopt the long-term rental model for the time being." Yang Wendong then asked tentatively: "But I may consider bringing in some shareholders. What does Mr. Sanders think?"
Sanders thought for a while and said, "Of course. Although HSBC is a creditor bank, we generally will not interfere with your company's internal operations, as long as it is not a decision that obviously has a major impact."
"Okay." Yang Wendong said nothing more.
Obviously, HSBC is willing to invest in Pao Yugang because of his ability and long-term rental model;
He still uses short-term rentals, which makes Sanders possible in the long term. It’s not optimistic;
But this is normal. In high-risk operations, you will make a lot of money if you win ten times, but you may lose everything if you lose once. Any bank will consider this problem.
On the third day after reaching the cooperation agreement with HSBC, the letter of intent for cooperation was completed. After both parties confirmed that it was correct, it was officially signed.
Then, Yang Wendong rushed to Japan again, and finally signed a letter of intent to purchase 10 large oil tankers and bulk carriers with Mitsui Shipyard and Mitsui Bank.
Some Japanese business media also heard about it. Such a large transaction is very rare in the Japanese shipbuilding industry.
When the news spread back to Hong Kong, it caused even more waves.
Hong Kong China Daily and Oriental Daily News reported directly on a first-come-first-served basis:
[US$50 million: the largest sea-going ship purchase in Hong Kong history]
[The birth of Hong Kong’s new shipping king]
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(End of this chapter)