"Palangi, based on our previous agreement, Land Rover will belong to Tata Motors, and a factory in North America will also belong to you. You can pick this factory first and invest according to the contract amount. At the same time, you will bear the corresponding debts." Feng Yu said generously.
Palangi is not happy. He still wants Volvo, but Wind and Rain Holdings Group is in charge of the acquisition, and Hua Xia's XX Investment Company is paying for it. Giving them a Land Rover is good enough, and they still want to pick the North American factory first.
Luckily, Palangi knows that Tongyong had stopped negotiating. It's just that they will stop negotiating when Tongyong is in dire straits. In the future, Tata Motors will still get one or two good saloon car brands.
"Then we will take this factory." Palangi grabbed a document. This factory is the biggest among the three factories, but it is not located in the best location. But Tata Motors needs to expand.
"Ok. We will sell Jiebao to Bing City Machinery Manufacturing Group. Manager Xu, since you all want Shanghai Tongyong's shares, do you all want Changan Fute's shares? And Volvo. Are you all sure you all want all of them? "
"We will take all of the joint venture company's shares, and Volvo will also take all of them. But we can give you one of our factories. We also have a factory in North America, right? We will take this factory. "
Manager Xu told Palangi his conditions. Of course, the higher-ups had discussed with Feng Yu beforehand.
"Ok. We will set up an asset management company according to our agreement and restructure these assets. We will split the non-performing assets, and we will bear the debts."
What Ralph meant was to buy out the liabilities of the non-performing assets. This means the company will pay off all the debts at once, and the remaining workers will be compensated to buy out their contracts. After that, some companies can be written off.
Tata Motors felt it is not worth it to buy out those companies. Although they will have to pay some interest every year, this will ease their financial pressure. They do not need to invest so much money at once.
The state-owned assets did not care. They had money now and could afford a buyout. However, it was also good to pay less money and use the saved money to invest and earn money.
However, they also understood that the current economic situation was good on the surface, but the impact of the sub-prime mortgage crisis had already appeared. Many small real estate finance companies had gone bankrupt, so the economic situation was likely to take a sharp turn. They didn't have the confidence to guarantee that their investments would make money at this time.
Generally, for such a large investment, they would choose some long-term stable investments, such as blue chips, high-quality long-term bonds, high-quality funds, and so on.
As for investing in the futures market, it was too risky, and most state-owned companies would not do it. The only thing they had done was invest in gold. They did not dare to use more than double the leverage. They were afraid that they would lose a lot of money if they were not careful. No one could afford to take that responsibility.
Although gold has been rising for the past few years, it is not that it has never fallen. The level of state-owned assets was average. Overall, they still made more profits than losses, but it was not that they had never suffered losses.
The state-owned assets have another idea. They want to be like Yidong Company and buy the bonds issued by Taihua Consulting. The returns were good, and the bonds were stable.
But some people objected to this. They felt Tai Hua Consultancy's bonds will have a return range, and the returns will be the lowest and the highest. Even if this project makes more money, they will not share it with the investors.
This gave the investors a feeling that they will suffer losses, and many people were unhappy. But Tai Hua Consultancy has concerns about letting Tai Hua Consultancy manage the company. First, they are worried, and second, Tai Hua Consultancy's commission is too high. Tai Hua Consultancy is registered in Hong Kong, and the commission system is negotiated.
That means Taihua Consulting is not restricted by China's commission. They can set a high commission or a low commission. China's commission is within a range, and they cannot exceed or lower the range.
Feng Yu knew China will have these restrictions, and he was prepared. Anyway, Hong Kong belongs to Hua Xia, and no one can say anything.
There were several ways to deal with non-performing assets, and all of them have their pros and cons. It all depends on the company's development.
Feng Yu told Ralph that they cannot buy out all the non-performing assets at once. Taihua Holdings also does not have money, and Feng Yu had transferred all their funds to the financial market. Although the funds were in their accounts, they cannot be touched.
So, Feng Yu decided to use another method. Securitization of the non-performing assets. What does this mean? Package these non-performing assets into securities and sell them. Feng Yu can use the funds to buy out all the non-performing assets.
Or, there is another way. Morgan Stanley and other big banks are experts in dealing with non-performing assets, and they can package these non-performing assets and sell them to Feng Yu.
Securitization of non-performing assets is still in the testing phase in Hua Xia, and it will be very troublesome to implement it in China. Luckily, Feng Yu will handle it overseas.
Palangi's team quickly calculated the amount of funds they had to pay, and he went to report to the company to discuss the funds.
Manager Xu whispered to Feng Yu. "General Manager Feng, our state-owned assets will buy out all these non-performing assets."
Feng Yu looked at Manager Xu. The securitization of non-performing assets in China is still in its infancy. How are they going to deal with it?
If these non-performing assets are dealt with properly, they can make money. But if they are not dealt with properly, they will be a burden to the company.
Manager Xu saw Feng Yu's puzzled expression and explained. "General Manager Feng, when you invested in Bing City Machinery Manufacturing Group, you had an agreement with the higher-ups. If necessary, you can accept a certain percentage of Bing City's Government's shares, right?"
Feng Yu raised his brows. "You all are going to swap your debts for shares?"
Debt-for-equity was to convert debt into shares. This method had been tried as early as the end of the 1980s, and it was very popular in the restructuring of state-owned enterprises in 1998.
In the past, Feng Yu diluted Bing City's Government's shares, including Fu Guangzheng's shares. According to the contract, Fu Guangzheng increased his investment and brought the company's shares back to 16%.
Although Bing City Government had increased their investments and brought the company's shares back, it was not as much as before. Now, Fu Guangzheng's shares are still higher.
Bing City Government does not have the money, but the higher-ups can. They just need to use Bing City Government's name to restore the company's shares and then use it to repay the debt to a state-owned asset.
"General Manager Feng, Director Zhang said that you had agreed to this." Xu Ruoyan said.
Do I need to go back on my words for this small amount of money? No matter what, Taihua Holdings will still be the controlling shareholder.
"No problem. You can speak to Zong Qingxian later."
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