The next day, at the same time, Reed arrived with another person. Feng Yu also called Li Zeju over to ask him to represent He Huang.
The details of the port's construction contract must be discussed with He Huang's professionals. Feng Yu's men might be able to verify the legal documents, but they might not be able to see through the traps in the contract.
Anyway, they will be working with He Huang, and the plan is for He Huang to be the major shareholder. Li Zeju's presence is not inappropriate.
"Feng, this is Li, right? I am Reed, the representative for this negotiation. This is Mark Eriksson, my assistant. "
This assistant must be sent by Reed's boss. But everyone has different specialties. Eriksson should be in charge of the railway negotiations, but nominally, he will listen to Reed's decisions.
Someone served coffee and tea, and only the 4 of them were left in the room.
"Feng, Li, my boss had said that since you all are not willing to split the shares equally and want the controlling stake, we cannot allow you all to hold 75% of the shares. If this happens, we will not be able to guarantee our interests."
"Our bottom line is to hold at least 45% of the shares, and you all can split the remaining 55%. But you all must guarantee that He Huang's shares will be higher."
"You all can hold 35% of the shares, and we will give up the controlling stake. This is my bottom line." Feng Yu replied calmly.
Many people mistakenly think that 50% of the shares is the controlling stake. But this is not absolute. Although you are the Chairman, you are not the only one who has the final say.
The shareholders' meeting needs more than half of the votes to approve the decisions. But the shareholders' meeting needs at least two-thirds of the votes to approve the company's division, merger, dissolution, amendments to the company's articles of association, etc. That's why 67% is the controlling stake. I have the final say in the company, and I can let the company do whatever I want.
If Feng Yu is from the California Consortium, he will also not hand over the controlling stake to an outsider. Feng Yu and He Huang share the same interests, and if they work together, they will be able to take over the California Consortium.
Now, even if the port does not expand, there will still be businesses and profits. But the profits will be lower, and it will be going downhill.
That's why they would rather make less money than give up all their authority. Now that you've been given an executive position and you've been fired, who are they going to complain to?
Feng Yu made this condition very clear to dispel the other party's concerns. He also wanted to fight for the greatest benefit for himself. Since he wanted to rebuild the port, he would definitely be able to earn more money in the future. An additional 1% of the shares would mean a lot of money in the future.
Of course, this also depended on how much they invested. Feng Yu and He Huang didn't care about the amount of investment. If they could buy all of it, they wouldn't mind paying a premium of 30%. This was too important to He Huang's world port layout.
"Feng, do you know which ports we are going to be cooperating with? Do you know how much you have to invest to dilute our shares to 35%? "Eric couldn't help but ask.
Feng Yu glanced at him. "Oh, then tell me, how much are your ports worth? This time, not only do we have to fork out money, but you also have to fork out money. Otherwise, your shares might be diluted to less than 35%. "
Feng Yu and He Huang are willing to invest more than 10 billion USD or even 20 billion USD as long as there are enough ports for them to rebuild.
How much is a small port worth? It's only a few hundred million USD. This amount is nothing to Feng Yu and He Huang.
Reed stared at Eric. I am the one in charge of this negotiation, and you are here to help me negotiate the railways. Why are you interrupting me?
"Feng, we also need to fork out money? This seems to be a little different from what we imagined. We had planned to cooperate with you all at 5 ports, including the berths, machinery, warehouses, etc., and the value of each port is at least 700 to 800 million USD. You all want to be the major shareholders, and it's not too much to pay a premium. That means you all will be investing more than 10 billion USD? "
Even if the 5 ports are valued at 800 million USD, the total value is only 4 billion USD. Feng Yu knows this is already a premium. Now, they want Feng Yu and his men to invest more than 10 billion USD. This is a premium. These guys are greedy.
Feng Yu looks at Li Zeju, and Li Zeju said. "You all are going to use the ports in LA, Seattle, San Francisco, Long Beach, and Oakland, right? These 5 ports are in good locations, but they are old. We estimate their total value to be less than 3 billion USD. "
"Based on what you all said, you all are estimating the total value to be 6 billion USD. 100% premium? What a big appetite. "
Li Zeju is furious. We really want to invest in ports in the US, but we cannot be a spendthrift. How much are the ports' profits every year? Furthermore, we are going to invest so much.
Even if it is for our strategic plans, we should not waste our money like this. Feng Yu does not know much about this, but Huang and the rest knew about it. They even know every port in the US.
"Reed, let me do some calculations for you. According to our plan, we'll need to invest as much as 700 million USD in equipment upgrades for each port. Not to mention, we'll need a bigger yard, a bigger warehouse, a bigger berth, and we'll even need to change the water depth around the port. "
"All in all, we will need to upgrade more than 2 billion USD for each port. It's not a problem for us to invest 10 billion USD, but your shares will double in value. Do you think we will accept this deal? That's why you all must invest a sum of money. This way, our investment will be of equal value. "
Reed and Eric looked at each other. The cost of upgrading each port is more than 2 billion USD? This is more than the value of a port. What kind of port are they going to build?
Could it be that they are going to take over the other berths and warehouses? If this is the case, the US ports will be the most prosperous on the west coast, and they will bring in more profits. Their ports will become a port that never sleeps.
But the cost of upgrading the facilities is too high. They must not agree to this because of the problem of workers' employment.
… …
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