In Hong Kong, we build a global business empire

Chapter 734 Hutchison Whampoa plunges 56%, Li Ka-shing's glimmer of hope

"There are reports that international investment banks such as Wells Fargo and Goldman Sachs are reassessing their credit lines to Hutchison Whampoa. Was your recent trip precisely for urgent consultations with these banks? Does this mean that Hutchison Whampoa's cash flow is indeed in trouble?"

The reporter's question was extremely pointed, almost directly revealing the purpose of Li Jiacheng's trip, and once again hitting the nail on the head.

Li Jiacheng was furious, but he miraculously maintained a tired smile on his face, which even carried a hint of helplessness: "My fellow reporters are really well-informed."

However, maintaining regular communication with a company's main banks is part of the company's daily work, and I believe this applies not only to Hutchison Whampoa but also to most companies in Hong Kong.

Therefore, my trip this time was not for any urgent consultations. A healthy bank-enterprise relationship is an important guarantee for the steady development of enterprises.

He again downplayed the "emergency consultations" as "regular communication".

Just then, the reinforcements finally came in handy. They formed an even stronger human wall and pushed the group of reporters back a few steps, clearing the way for the vehicles.

"I apologize, everyone. I do have an important business appointment and time is tight, so I must leave. Thank you for your concern. Please refer to our official announcement for the most accurate information. Thank you!"

Li Jiacheng gave the other party no further chance to ask questions, and quickly rolled up the car window, shutting out all the noise and flashes of light outside.

"Drive!" he said to the driver in a deep voice, with a hint of barely perceptible relief in his tone.

The vehicle was finally able to slowly drive away, leaving the reporters who were still asking questions behind.

Inside the car, Li Jiacheng leaned back in his seat and let out a long sigh.

The mental effort required in those few short minutes was comparable to that of a high-intensity negotiation.

He loosened his tie and felt his back was soaked with a thin layer of sweat.

"No matter what, when I go to Standard Chartered Bank to see the new taipan, I must extend the contract period for the loan that is about to expire!" Li Jiacheng vowed through gritted teeth. This was the bottom line requirement for stabilizing the situation, and he was willing to pay any price.

Otherwise, once the chain reaction of a broken capital chain is triggered, the consequences would be unimaginable.

He took a few deep breaths, forcing himself to calm down from the tension of his earlier exchange with the reporter and the fury over the plummeting stock price.

Now is not the time to be emotional; he needs to focus all his energy on dealing with the tough battle ahead against Standard Chartered tycoon Tyronn.

Previously, if he could get funding from Wells Fargo, he wouldn't have had to worry about these things.

He was well aware that Standard Chartered Bank was having a tough time, given the enormous price it had paid to acquire Huafeng Bank, not to mention the replacement of its Hong Kong executives.

But now, only Standard Chartered Bank can really help him.

Li Jiacheng took a bottle of ice water from the car refrigerator, took a big gulp, and the cold liquid cleared his chaotic thoughts slightly.

He began to think rapidly and soon came up with an idea.

Negotiating with Mr. Tyron requires a few preparations.

What are his bottom line, his bargaining chips, and the price he paid?

It is essential to secure at least a three-month loan extension, which is the minimum requirement, and ideally, a six-month extension, to give him sufficient time to sell assets or seek other financing.

Despite the sharp drop in share price, Hutchison Whampoa's core assets, such as ports, real estate, and retail networks, remain intact, which form the basis for negotiations.

Given the deep-rooted relationship between HSBC and Hutchison Whampoa, HSBC certainly doesn't want Hutchison Whampoa to run into problems, which is a factor they have to consider.

Moreover, although Li Jiacheng was also upset by the temporary plunge in stock price, he believed that the stock price would eventually rise again as long as the funding problem was resolved.

As for the price, the other party will definitely take the opportunity to raise conditions. Raising the interest rate is inevitable, and they may also require additional collateral.

For example, his personal shares in Cheung Kong Holdings, or equity in certain high-quality assets under Hutchison Whampoa, and even the possibility of demanding terms such as sending financial supervisors, he must draw an acceptable bottom line in his mind.

Furthermore, when he goes to Standard Chartered Bank this time, he can show weakness, but he cannot show cowardice.

We must acknowledge the “unnecessary panic” in the market, emphasize that Hutchison Whampoa’s fundamentals remain solid, and express absolute confidence in the future, but at the same time, we must realistically face the current “liquidity challenges.”

The key is to convince the other party that supporting them through the current difficulties is in Standard Chartered's long-term interests; otherwise, if Hutchison Whampoa collapses, HSBC, a subsidiary of Standard Chartered, will also suffer huge losses.

The vehicle drove smoothly toward the Standard Chartered Bank building.

Li Jiacheng straightened his suit and tie, concealing the fatigue and anger on his face, and put on his usual calm and confident expression.

……

"Clang clang clang."

As the four o'clock afternoon approached, the closing bell of the Hong Kong Stock Exchange rang, and the last trader in a red vest ended the trading session.

In the trading hall, there is a huge, simple LED electronic display screen.

This type of display screen uses light-emitting diodes (LEDs) for illumination, unlike the LCD screens of later generations.

At this very moment, the echoes of the closing bell still lingered in the trading hall, but the final price of Hutchison Whampoa displayed on that huge, simple LED screen composed of countless light-emitting diodes was like a cold scar etched into the hearts of every witness.
-
56.32%.

A shocking number, almost halved and then halved again.

Just one day.

Just one day earlier, Hutchison Whampoa was the second-largest listed company in Hong Kong.

Now, however, it has slipped to ninth place, with a market value of only HK$46.69 billion!
If it weren't for the significant number of transactions completed in the last ten minutes, Hutchison Whampoa's market capitalization might have even fallen below HK$40 billion.

In a single trading day, more than half of the market value of Hutchison Whampoa, a giant in the industry, vanished into thin air, something many people did not expect.

The hall did not immediately return to its usual hustle and bustle.

After the near-frenzied selling and stampede in the last half hour, a near-exhausted silence enveloped the scene.

The red-vested traders either slumped in their chairs or expressionlessly sorted through documents, the air thick with sweat, paper, and an indescribable sense of frustration.

Occasionally, people would whisper among themselves, their eyes involuntarily glancing at the screen before quickly looking away, as if even a second glance would burn their eyes.

"They've gone mad...they've all gone mad..." a middle-aged stock investor muttered to himself, still clutching a stack of share certificates that he hadn't been able to sell completely.

An older stock investor next to me took off his reading glasses and rubbed his temples vigorously: "I don't know if it will fall further tomorrow. My stock assets have already depreciated by half. Hutchison Whampoa, that's a blue-chip flagship..."

"So what if it's a flagship company? So what if Li Ka-shing is in charge? The banks might withdraw loans, and the market lacks confidence!" a young stock investor next to me remarked with a sigh.

"Yes, luckily I ran fast and sold within half an hour of the market opening this morning. I lost a lot, but it's better than losing everything," another person chimed in, his tone filled with relief at surviving a close call.

In the past two years, due to Lin Haoran's influence, the Hong Kong stock market has indeed become different from the Hong Kong stock market in another world.

Although the overall trend is indeed upward, it is a bull market.

However, there are occasional instances where Lin Haoran's competition with a certain giant causes the other party's stock price to collapse.

For example, Jardine Matheson was forced to flee Hong Kong by Lin Haoran, suffering heavy losses. Naturally, the shareholders who held Jardine Matheson stock at the time also suffered heavy losses.

For example, when Huifeng Bank was hit hard and its cash flow was disrupted, many Hong Kong giants were dragged down.

Which of those companies didn't see their stock price drop by two or three times or more?
Therefore, Hong Kong stock market investors have become much more immune to this issue.

At least they won't be like before, constantly running to the rooftop of buildings to threaten suicide.

After all, many people actually made a lot of money during the bull market of the past two or three years.

Now that we've lost money, it's just a partial return.

On the other side, in the Kang Le Building, is the office of Galaxy Securities.

At this moment, Lin Haoran sat in Dai Shi's office, looking at the documents in his hand, and became increasingly satisfied.

After watching the press conference of Huanyu Research Company at home this morning, he did not leave home, but came to Kang Le Building in the afternoon.

The document in his hand at that moment showed that Galaxy Securities already held 24.62% of Hutchison Whampoa's shares!

In addition, Cheung Kong Holdings also holds 21.23%.

The surge in trading volume in the last ten minutes of trading today, which halted the decline in Hutchison Whampoa's stock price, was actually orchestrated by Galaxy Securities.

Ultimately, Galaxy Securities acquired approximately 2.12% of Hutchison Whampoa's shares within the group for less than HK$100 million.

The reason why they were so bold as to absorb so much in just ten minutes is quite simple.

Having fallen to this level, everyone is bound to think that some daring market manipulators or investors will try to buy at the bottom.

These bottom-fishing attempts are a very normal phenomenon, so they are unlikely to attract the attention of Hutchison Whampoa.

Hutchison Whampoa executives may even feel grateful to these "investors" who bought at the bottom of the market.

After all, without the massive buying support in the last ten minutes, the drop could have exceeded 60%, or even triggered a more terrifying chain reaction of collapses.

Unless such large-scale acquisitions occur every day, even if Li Ka-shing has a very strong trading team, it would be difficult for him to detect that someone is eyeing Hutchison Whampoa.

"Don't worry, boss. We've been in this industry for years and understand the psychology of our peers best. This time, our acquisition will definitely not attract Mr. Li Jiacheng's attention," Dai Shi explained. "They might still be rejoicing that some 'uncooperative' rash man or 'shrewd' long-term investor has finally stepped in to support the market. But they would never have imagined that these 'market rescue' funds come from the very people they least want to see," Lin Haoran chuckled, his tone tinged with sarcasm.

Dai Shi added, "Moreover, our acquisition cost is extremely low. Even if the stock price continues to fall tomorrow, our unrealized losses will be completely within an acceptable range. More importantly, our shareholding ratio has reached a very delicate and dangerous position."

It is indeed very subtle.

Cheung Kong Holdings holds a 40% stake in Hutchison Whampoa, a fact well-known in Hong Kong's business community.

After all, as the controlling shareholder, Cheung Kong Holdings is required to disclose its true shareholding situation.

Li Jiacheng also told reporters at a press conference that he would not increase his shareholding after reaching 40%.

After all, normally speaking, once you hold as much as 40% of the shares, there is basically no chance of losing control.

Lin Haoran had conducted an investigation and found that in addition to the 40% stake held by Cheung Kong Holdings, several other shareholders and investment institutions collectively controlled approximately 13% of Hutchison Whampoa's shares.

As long as the price is right, it wouldn't be difficult for Lin Haoran to acquire all 13% of the shares.

What does this mean?
This means that he now holds 24.62%, plus the 13% stake he could acquire at any time, bringing his total to nearly 38%.

They are just one step away from catching up with Cheung Kong Holdings' 40% stake in Hutchison Whampoa!
To this day, Li Jiacheng's team has yet to discover this.

The reason is actually quite simple: although it seems that there are only stocks left in the market with a drop of more than 20%.

Hutchison Whampoa has been listed for many years and has issued a large number of shares, in addition to its high market value.

Therefore, even if a shareholder holds only a mere twenty-odd percent of the shares, their absolute number and dispersion are enough to make any large-scale covert acquisition difficult to detect in the early stages.

Moreover, Li Jiacheng's team is currently focused on overcoming the difficulties of a broken capital chain and stabilizing the market panic caused by the sharp drop in stock price. Naturally, their sensitivity to monitoring subtle changes in the equity structure is greatly reduced.

More importantly, Li Jiacheng and his team probably still firmly believed that his 40% shareholding was an unshakeable fortress.

Li Ka-shing is used to being the hunter, used to being in control of the situation, but he may not be used to being the prey. He would never have imagined that someone would dare to, and be able to, target his weakest point when he is at his most vulnerable.

The game of capital often hinges on the minute differences in information asymmetry and attention allocation.

Moreover, Galaxy Securities' actions happened precisely when his attention was most distracted.

Moreover, they operated through hundreds of offshore accounts and related parties. Even if Hutchison Whampoa investigates afterward, it will take a lot of time. By the time they figure things out, the situation will probably be over.

Lin Haoran walked to the huge map of Hong Kong and calmly scanned the locations that marked Hutchison Whampoa's core assets: the Kwai Chung pier, the prime properties in Central, the Whampoa Dockyard in Hung Hom, and the ParknShop and Watsons stores all over Hong Kong...

This is a vast business empire, but now it is showing signs of fragility due to core cash flow problems.

He intends to seize the opportunity and bring this vast business empire under his control.

Originally, as a fellow Chinese entrepreneur, Lin Haoran did not intend to acquire Hutchison Whampoa.

If anyone is to blame, it's Li Ka-shing for repeatedly going against him.

In that case, you can't blame him.

Just then, Lin Haoran's mobile phone rang.

"Hello?" He picked up the phone and pressed the answer button directly.

"Boss, it's me. Do you have a TV nearby? Mr. Li Jiacheng will be holding a press conference in ten minutes at the Standard Chartered Bank headquarters in Hong Kong. ATV is broadcasting it live." The call was from Cui Zilong, and he said quickly.

"Okay, I understand, thank you!" Lin Haoran said and hung up the phone.

"Li Jiacheng's press conference, and it's being held at the Standard Chartered Bank headquarters, that's interesting," Lin Haoran murmured.

He knew that Li Jiacheng was not so easy to defeat, so he did not have high expectations for the press conference of Huanyu Research Company.

Now it seems that this is indeed the case; barring any unforeseen circumstances, Li Ka-shing must have reached some new agreements with Standard Chartered Bank.

The most likely scenario is that Standard Chartered Bank will publicly support Li Ka-shing and indicate that it will provide him with full financial support.

In this way, his difficulties will be temporarily overcome.

However, even so, this press conference by Universal Research Company was not entirely useless.

At least everyone knows that Hutchison Whampoa and Cheung Kong Holdings are currently experiencing cash flow problems.

In addition, Galaxy Securities took this opportunity to acquire a significant number of shares at low prices, bringing it one step closer to catching up with Cheung Kong Holdings' stake in Hutchison Whampoa.

He quickly left the Galaxy Securities office and returned to the 51st floor.

Passing by Ma Shimin's office, Lin Haoran called him out and they went together to Lin Haoran's own office.

Because there was a color television in his office.

In the office, after Lin Haoran turned on the television and tuned it to a local channel, he told Ma Shimin about the news that Cui Zilong had reported.

At this moment, the footage from Hong Kong's TV station was indeed showing the scene of Standard Chartered Bank's press conference.

However, neither Li Ka-shing nor Mr. Tyronn, the new tycoon of Standard Chartered Bank, appeared in the footage at this moment.

Clearly, the press conference is not yet scheduled.

"Boss, it seems that Mr. Li has found a way to get through the difficulties temporarily. The fact that he chose to hold the press conference at Standard Chartered Bank is a strong signal in itself."

It seems Standard Chartered is willing to lend him a hand during his most difficult time, even though Standard Chartered itself is currently facing some problems.

Ma Shimin looked at the television screen and analyzed the situation calmly.

"Give them a hand? Mr. Ma Shimin, do you believe that bankers would lend a helping hand in times of need? Especially a bank like Standard Chartered, which has just undergone tremendous changes, is short of money, and urgently needs to stabilize its performance?" Lin Haoran chuckled.

Upon hearing this, Ma Shimin pondered for a moment and said, "You mean the price will be extremely high?"

“That’s for sure.” Lin Haoran’s gaze fell on the agitated group of reporters on the television screen. “I suspect that what Li Jiacheng received couldn’t have been unconditional support. It might have involved higher interest rates, collateral for core assets, and possibly even bank personnel monitoring his finances…”

These are all high-probability events. He's trading his future freedom and partial control for immediate respite. At this point, he doesn't have many options left.

“Even so, as long as he can stabilize the situation, it will be a victory for him. As long as he can buy time, with his abilities and the quality of Hutchison Whampoa’s assets, he may well be able to make a comeback,” Ma Shimin said objectively.

“That’s right, time is what he needs most right now.” Lin Haoran nodded, but a cold smile played on his lips. “But that’s also what we can’t give him.”

Today, the press conference held by Huanyu Research Company is nothing short of squeezing Li Jiacheng's time and giving him no chance to breathe.

As soon as Lin Haoran finished speaking, the commotion on the television screen intensified, and the reporters' cameras all turned towards the entrance.

Li Jiacheng finally appeared, walking towards the podium accompanied by Mr. Tyronn, the taipan of Standard Chartered Bank, and several senior executives.

He tried to appear steady with his steps, and his face regained its usual confident expression, but upon closer inspection, one could still detect a hint of tension that was hard to completely conceal, as well as a lingering weariness deep in his eyes.

Meanwhile, the newly appointed Standard Chartered Bank Hong Kong tycoon, Mr. Tyronn, wore a calm smile, seemingly having gained considerable benefits from his negotiations with Li Ka-shing.

Having gained the benefits, Standard Chartered Bank will naturally provide full support to the other party.

After all, even in its worst circumstances, Standard Chartered Bank has not fallen to the point of collapse.

In addition, their subsidiary, Huifeng Bank, has loans maturing every month that can help them recover funds.

Therefore, if they really wanted to help Li Jiacheng, they certainly could.

Lin Haoran looked at Tyron's calm smile on the TV screen, as if he had everything under control, and was not surprised.

Ma Shimin said solemnly, "Judging from their expressions, Mr. Li has probably mortgaged more than just some of his assets in order to secure Standard Chartered Bank's support. It may even include a significant portion of Hutchison Whampoa's future decision-making power."

Standard Chartered Bank was taking advantage of Li Ka-shing's misfortune, but it did give him a glimmer of hope.

"A glimmer of hope? That depends on whether he can seize it, and whether we'll give him that chance," Lin Haoran laughed.

The increase in shareholding to 24.62%, coupled with his secret holdings of shares in Cheung Kong Holdings, certainly gave him a lot of confidence.

Moreover, since he is currently in the shadows while his opponent is in the open, his chances of success are still quite high.

On television, Li Ka-shing began to speak, and as expected, he emphasized the "solid cooperation" and "shared confidence" with Standard Chartered Bank, stating that Hutchison Whampoa and Cheung Kong Holdings had the full support of HSBC and Standard Chartered Bank, and that there were absolutely no funding problems, reassuring shareholders.

However, they remained tight-lipped about the specific terms.

Tyron nodded occasionally, his face always bearing that formulaic smile, as if he were overseeing a high-risk deal that had just been agreed upon, rather than supporting a long-term partner.

"Boss, he's playing with fire. The funds he's obtained by trading core assets and future flexibility are like giving a patient who has lost too much blood a temporary stimulant. Once the effect wears off, the situation may be worse than before."

"Moreover, does he really think he can control the time he's gained?" Ma Shimin commented.

This situation is strikingly similar to the numerous unequal agreements Li Ka-shing signed with Hui Fung Bank two years ago in order to acquire Hutchison Whampoa.

As a former executive director of Jardine Matheson, Simon Murray knew more or less about the inside story of the agreement reached between Li Ka-shing and Hui Fung Bank.

(End of this chapter)