once Upon a time

In 1999, when the stock market was at its peak, Hong Kong Telecom occupied 97% of the Hong Kong telecommunications market, with a net asset value of HK$380 billion and stable cash flow.

The British Cable and Telegraph Company chose this time to make a move. It was extremely wise to sell Hong Kong Telecom, taking advantage of the high value to obtain much-needed cash flow.

The abacus is very good.

This transaction is worth US$35 billion and is an unprecedented big cake in Hong Kong’s history.

Since Dadong Cable and Telegraph Bureau has strict admission requirements, not many are eligible to share.

There were two main competitors at that time. One was Singapore Telecom, which was dominated by the Lee family of Sing Tao and was once the largest mobile phone service provider in the world.

The second one is Yingke Digital Company, which is preparing to swallow the elephant with the support of Li Chaoren.

Through a series of dazzling asset operations, Li Zekai, the boss of Yingke Digital Company, had the last laugh.

It spent US$13 billion plus company shares to acquire the behemoth Hong Kong Telecom. The total value of the merger was US$35.5 billion, forming the current Yingke Telecommunications Company.

The classic case of a snake swallowing an elephant was completed. The market value of Yingke Telecom reached a peak of HK$500 billion. Li Zekai became famous in one battle and received the title of "Little Superman".

Who would have thought?

The Internet high-tech bubble burst, turning the former prosperity into ashes.

The Hang Seng Index plummeted from 14,000 points to more than 8,000 points, and the concept of Internet high-tech stocks was brought back to its original shape.

Affected by the irrational and crazy decline of the stock on the Stock Exchange, the market value of Yingke Telecommunications Corporation plummeted to a low of HK$26 billion, which made the Wang Group realize its advantages.

The Internet high-tech bubble burst at the wrong time. "Superman" Li Zekai must swallow this bitter drink at this moment.

Regardless of its own ability, it carried out heavy debt M&A, with more than HK$300 billion of M&A funds all coming from capital operations, which greatly magnified the risks of the company's operations when the financial bubble burst.

Given that PCC Telecom is burdened with heavy debts of more than 14 billion U.S. dollars, it is unable to repay the debt on time.

Under Wang Yaocheng's instruction, creditors led by HSBC rejected the company's debt restructuring plan.

It is normal for banks to support the high and suppress the low. It is almost a miracle on earth to provide help in times of need.

move

It cut off Yingke Telecom's source of liquidity, and 3 billion US dollars in loans were overdue, pushing it into an abyss of destruction and the last straw that broke the camel's back.

There is already too much bad news on the Hong Kong Stock Exchange, which is plagued by tragedy.

In fact, Li Chaoren is capable of raising US$3 billion to extend the life of Hong Kong PCCW Telecommunications Company.

It's a pity that he didn't take action.

Because among the claims of Hong Kong Pacific Telecommunications Company, HSBC's US$6 billion loan will expire at the end of the year, Li Chaoren wonders whether the market will pick up by then?

Li Chaoren can't save the world, nor can he save his son's company. He really doesn't dare to try this.

Beginning of 2001

The United States is deep in economic recession and the global economy is in a bleak state. Only mainland China stands out.

Under such circumstances, Li Chaoren really didn't dare to bet. If he made a wrong bet, he would lose everything and drag the entire Li family group into the abyss of debt.

Sighted the opportunity

HSBC, which had taken the lead in the loan, struck back, completely wiping out Li Chaoren's family and acquiring the high-quality Yingke Telecommunications Company.

Although Yingke Telecom's difficulties are only temporary, if it cannot overcome the current hurdle, the only outcome will be bankruptcy and liquidation.

Free market competition in a commercial society relies on capital to speak for itself, without warmth and compassion.

in the office

Listening to Du Bo's detailed report, Wang Yaocheng's face showed a smile. Now that the controlling stake in Yingke Telecommunications Company has fallen into his hands, he is a cooked duck that can no longer escape.

Although Hutchison Whampoa did not give up and continued to appeal to the Hong Kong Court of Final Appeal against the Hong Kong Supreme Court's decision, this did not affect the Hong Kong Supreme Court's decision.

The judgment of the Supreme Court has legal validity and must be implemented.

Li Chaoren’s idea is simple;

It means delaying the execution of the judgment through legal proceedings, waiting for changes, and waiting for the market to recover. There is still a one-in-10,000 chance of a comeback.

No matter the quarrel, the Wang consortium has never been afraid of anyone when it comes to lawsuits.

Hutchison Whampoa can hire the best Queen's Counsel in Hong Kong, while the Wang Group can hire the best team of lawyers from the UK to join the lawsuit.

Want to argue?

If you fight a lawsuit for ten or eight years, there will be no result, and by then all the day lilies will be cold.

HSBC used the Hutchison Whampoa shares it held as collateral to make transactions with Bank of China and Citibank, and took up all the shares of PCC Telecommunications in their hands.

Even if Hutchison Whampoa wins the case in the Court of Final Appeal, it will not be able to save PCTC from remarrying.

Everything is a foregone conclusion, the process is reasonable and legal, and no one can turn the sky upside down.

Calculate the account carefully

This 100% acquisition of Yingke Telecom stock cost approximately US$8.35 billion, of which US$6 billion was the original acquisition loan, US$433 million in bank interest, and the rest was cash to replenish other creditors. Both parties were happy.

Compared with a year ago, when Li Zekai acquired Hong Kong Telecom for US$35.5 billion, the US$8.35 billion paid by the Wang Group was undoubtedly a bargain, a huge bargain.

All those in the know know;

Yingke Telecom is worth far more than this amount of money, and it is so undervalued that it is simply outrageous.

However, this is a cruel market. If you don’t have strong capital to protect your territory, you will eventually be dragged down to the bottom by the prehistoric predators lurking under the water and eat them, becoming delicious prey.

The only ones who suffered were Li Chaoren and his son who were divided and eaten.

The assets of the super-rich Li Chaoren have shrunk by more than half, and the flagship Hutchison Whampoa company may change hands to another person. His second son, Li Zekai, has been directly brought back to his original form, smooth and clean, and saddled with huge debts.

"Okay, well done."

People are in high spirits when happy events happen. Wang Yaocheng was so happy that he couldn't hide the smile on his face.

Now, the consortium owns Hong Kong's electricity, gas, communications and other public sector assets, which can continue to bring stable revenue, and fully control the lifeline of Hong Kong's economy, becoming the true uncrowned king of Hong Kong Island.

The honorary title of Lordship conferred by the Queen of England and the title of Royal Baronet are the highest honors awarded to Chinese people in history. The suffix "Lord" must be added to the title in news reports, which is highly recognized by Hong Kong society.

Invisibly

His status far exceeds that of Sir Run Run Shaw, Sir Li Ka-shing and other celebrities in Hong Kong Island.

No matter where you go, follow the rules of the game

In the hierarchical aristocratic circle, Wang Yaocheng indeed has a higher status than them.

Taking control of Hong Kong PCCW Telecommunications Company, it further strengthened its penetration into Hong Kong, the base camp, and spread its influence to every aspect of the lives of ordinary people in the market.

Hong Kong’s status as the uncrowned king is unshakable.

Wang Yaocheng doesn't have the slightest fondness for Li Chaoren, the man who invented the public stall area. He has led a large number of real estate developers into trouble, so it's nice to have the opportunity to step in.

Paying back debts is a matter of course.

Take inventory of your family assets;

The recent series of mergers and acquisitions, coupled with heavy investment in the technology field, have reduced the consortium's cash reserves to US$14.7 billion.

Fortunately, in the second fiscal quarter, the companies under the consortium can still contribute stable revenue and replenish the depleted cash pool.

"Abo, try the authentic Wuyishan Dahongpao in China."

Finished talking about Yingke Telecom

Wang Yaocheng greeted Du Bo for tea, and the conversation turned to a more relaxed topic: "Now, how do you divide the business of HSBC Bank?"

"Chairman, after the merger with British Smith Bank.

Qi Yaonian, executive director of HSBC and senior banking professionals, Miao Sicheng and I formed a top leadership team and stationed at the Smithsonian Bank headquarters in London.

Responsible for asset integration, overlapping organizational adjustments and bank branch closures.

Mr. Mo Yuxuan, led by Executive Director Shao Wilson and Vice President Wilkinson, will continue to stay in Boston and be responsible for integrating the North American business.

At present, London's merger plan has entered deep water.

More than 300 branches and business outlets will be eliminated in the British Isles, and more than 200 branches will be eliminated in North America. A total of more than 17,000 employees will be eliminated, and unnecessary expenses will be reduced by more than 1.2 billion US dollars annually.

These assets, which are highly overlapping with those of HSBC, will be sold in a package with an estimated value of between US$2.4 and US$2.7 billion. Many interested peers have already come to inquire about the price.

Because these assets are only the original value of fixed assets, the customer resources and loan business of the original Smith Bank business outlets will all be transferred to the nearest branches and business outlets.

The sale price can only reflect the value of fixed assets, which is relatively cheap."

Wang Yaocheng thought about it and said;

"There is no rush to do this. Let's do a good job of laying off personnel and outlets first. Now that the economy is in recession and fixed assets have depreciated sharply, it is not cost-effective to sell.

The sale of excess assets can be postponed until the market improves.

HSBC lacks working capital and can raise it in the market by issuing additional shares.

Mr. Buffett, the owner of Berkshire Hathaway, once said:

We must be greedy when others are fearful, and we must be fearful when others are greedy.”
To be continued...