Chapter 1020: Alternative Solution to Prevention

The weather in Hong Kong in mid-May is hot. As an island city, the air is also soaked with the slight smell of the sea. Standing in the empty pick-up hall, through the crowd and the glass door, it was raining outside the hall, and the outdoor water vapor was misty and vague. When I walked to the door, I watched a group of black birds passing by in the rain, Zhai Danqing took a breath, thinking that Hong Kong was really dull and wet, and suddenly I saw Tang Jing, who was holding Zhang Ke's arm, leaning over and looking at her.

"Ah, are you talking to me?" Zhai Danqing suddenly came to his senses and asked.

"Hong Kong, do you have any place you particularly want to go to? Zhang Ke can't give any exciting suggestions." Tang Jing said.

Zhai Danqing stretched out a finger and scratched his ears gracefully. He smiled and said, "The spring of Jianye this year is relatively dry, and there is no rainy day. Finding a place to sit down and looking at the rain outside the window is already a pretty good enjoyment for me - there is nothing special place to go."

"Then go to the beach. Listen to the weather forecast, the rain will get heavier." Tang Jing said.

Zhang Ke and the others did not go to the hotel, so they went directly to the pier near the hotel and found a coffee shop to sit down. The air was filled with the strong aroma of coffee. Looking at the increasingly loud rain outside the window in the dim shop, you would feel a hint of luxury and decadence coexistence.

Zhang Keke was not in the mood to experience the bourgeois mood in the rain. Ye Jianbin and Sun Shangyi were going to meet him later with Liu Chengwei and some officials from the CNOOC Listing Working Group.

Among the three domestic oil giants, CNOOC is a young player, but its scale cannot be underestimated. The total scale of the oil exploration, development, production and sales business that intends to be listed on Xiangyang Offshore is nearly 24 billion yuan, and its net assets exceed 11 billion yuan. This is also the core assets of CNOOC, and are all placed under CNOOC, a listed company.

CNOOC plans to issue 24% of its shares on the Hong Kong United Stock Exchange to raise US$1 billion. At this time, Kumho Commercial can barely take out US$1 billion. Since its establishment, Kumho Commercial has raised funds in Southeast Asia by various means, and only then has invested 600 million US dollars. Projects such as the Dongshan Island Port Construction Project and a tens of million-ton steel industry base have not yet ushered in the peak of construction. Although it is currently undertaking the iron ore import business of Dongshan Steel, on the one hand, Dongshan Steel consumes relatively limited iron ore. On the other hand, Kumho Commercial has such strong capital strength and has more financial means to reduce the use of cash. Kumho has no financial pressure for the time being.

However, if Kumho really wants to cover 24% of CNOOC's equity, it is not an ordinary financial investment, but a strategic investment. Controlling 24% of CNOOC's equity can directly affect the development direction of CNOOC and penetrate the management of CNOOC.

The CNOOC and CNOOC are the only force behind China's development of offshore oil and energy strategies, and it can also be said to be the entire force at this time. How can other capital forces be allowed to exert influence and infiltration on their development strategy? Even if the senior central officials are confused and open this hole, those overseas oil giants and other capital forces will snort at the smell of meat and swarm over, squeezing Kumho.

Even through the financial investments that are involved in the open market of the Hong Kong United Stock Exchange, Kumho cannot be too popular and directly take out US$300 million to participate in the issuance of new shares. The shareholding ratio reaches 7.2% is almost the limit. If the financing is smooth, controlling the shareholding ratio between 5-6% is the most beneficial to the financial structure of Kumho Commercial.

Ye Jianbin, Sun Shangyi, Liu Chengwei and others came in, and the entourage and drivers filled the small cafe with them, and there was also representatives of CNOOC's lead underwriter for stock issuance.

Liu Chengwei didn't mind meeting Zhang Kexuan on such an occasion. He spent all day traveling between conference rooms during this period. When he saw the long conference table in the conference room, he felt disgusted. The rich aroma of coffee in this small shop made people feel comfortable.

Although Kumho promised a financing share of US$400 million and the remaining issuance share of US$600 million is also under a lot of pressure, especially Hong Kong media has recently reported many negative reports about CNOOC, and Liu Chengwei and other senior executives of CNOOC have no experience in dealing with these issues and are still very passive.

Zhang Ke asked Liu Chengwei and others to sit down and said straight to the point: "The situation is even less optimistic than we expected, the economic situation is also a bit turbulent, the temperature in North America has warmed up, and crude oil consumption in North America is gradually weakening, and oil prices are likely to fall further in June. Let's discuss alternatives for failed issuance..."

Liu Chengwei was not sure what alternative Zhang Ke could propose, so he straightened his waist and looked at Zhang Ke, hoping that he would continue to talk.

"You cannot issue new shares, but you can also issue bonds through the United Stock Exchange. Kumho's direct subscription ratio for bonds can be increased to ensure that CNOOC's financing plan will be smooth." Zhang Ke said.

Liu Chengwei was quite complicated when he heard Zhang Ke say this, and his habitual thinking made him feel a little doubtful about Jinhu's hot pillow. He glanced at Zhang Ke and quickly curled this doubt from his eyes. He felt a little ashamed. Jinhu put all his efforts to help CNOOC. This kind of doubt came from inexplicable. Unless CNOOC went bankrupt and liquidated, otherwise, the debt rights formed by public issuance of bonds will have much weaker influence on CNOOC than directly holding shares.

Liu Chengwei knew that Jinhu Commercial could hold huge amounts of money, and it was raised by issuing corporate bonds to Southeast Asian Chinese merchants, and had to pay the debt interest to investors. If Jinhu purchased bonds from CNOOC, the debt interest that the funds used could be obtained would not be much higher than the debt interest that they had to pay. It can be said that it was almost a profitable transaction, at least much lower than the expected returns of equity investment, and the funds used would be particularly huge, which would seriously affect the development plan of Jinhu Commercial. Liu Chengwei pondered for a moment, looked at Zhang Ke, and asked: "Why?" but his tone was very sincere.

"I have learned that this financing is still important for the development of CNOOC and the development of the national offshore oil industry," said Zhang Ke. "Kumho is a commercial institution and should take chasing commercial profits as its responsibility, otherwise it will be a dereliction of duty. We have seriously thought that Kumho's interest demands can be consistent with national interests, so that the future path can go further. Purchasing CNOOC bonds will not be a loss-making transaction. Besides, the new stock issuance plan does not necessarily fail. I think that such a preventive alternative will make the pressure on the shoulders of CNOOC's senior management less. Of course, we should still promote the listing and issuance of new stocks as much as possible."

In 1999, China's offshore oil mining equipment almost relied on imports, especially deep-sea exploration and mining equipment, the cost was astonishingly large. Large deep-sea drilling ships cost hundreds of millions of dollars. CNOOC did not have the ability to directly purchase them. Even if they were rented, the daily rent would be as high as 200,000 to 300,000 US dollars. Although the central government would unswervingly adhere to the development of CNOOC, the country's foreign exchange reserves were limited, and there were too many strategic development levels that needed to support, so foreign exchange support for CNOOC was very limited. Overseas financing was an extremely critical step in the development of CNOOC.

Ye Jianbin said: "We also communicated urgently with the senior management of Nanyang Maritime Transportation. If CNOOC is willing to give priority to renting Nanyang Maritime Transportation tankers, they can also participate in the bond subscription plan..."

By participating in the issuance of CNOOC bonds, the direct income of Kumho Commercial will drop significantly, but it is not without benefits. CNOOC will be able to successfully raise funds, which will inevitably promote the development of the country's offshore oil industry. The demand for offshore oil mining and crude oil transportation equipment will surge. CNOOC enters the field of refined oil refining and chemical, and the demand for ocean transportation will also increase significantly. A large number of orders can flow to companies with Kumho Commercial's stake, such as Nanyang Shipping, Dongshan Shipbuilding, and Dongshan Steel, increasing the marginal income of Kumho Commercial.

The issuance of bonds is only a must-have alternative plan. To dispel the concerns of CNOOC's senior management, it also makes CNOOC's senior management agree that Kumho will provide advice on overseas listing at a deeper level. Although CNOOC can also issue bonds through the open market after its successful listing, that is another concept.

At present, the media mainly questioned that CNOOC's monopoly monopoly monopoly will be impacted. Zhang Ke suggested that CNOOC's senior management respond more resiliently. On the other hand, he hoped CNOOC would encourage the competent department's State Economic and Trade Commission to make the position of the monopoly monopoly monopoly monopoly in the oil industry.

The State Council attaches great importance to CNOOC’s overseas listing. In addition to the development of the offshore oil industry, China is actively promoting the participation of the General Agreement on Tariffs and Trade, promoting the overseas listing of super-large state-owned enterprises, accelerating the integration process with the global economy, and increasing the efforts to open up are some preliminary conditions for promoting entry into the country.

Although we do not expect the central government to allocate another billion US dollars to CNOOC, it is still possible to make the State Council issue a statement and stand.

I talked a lot with Liu Chengwei and others in the cafe and learned more practically about the difficulties encountered by CNOOC's listing. In the first half of 1997, red-chip stocks in the Hong Kong securities market were popular. As long as a state-owned enterprise listed in Hong Kong for financing, it would receive almost ten times or dozens of times oversubscribe. The shadow orders obtained by CNOOC at this time were less than 80%. In addition, considering that a considerable number of these shadow orders will be cancelled at the last moment. Strictly speaking, Kumho's promises must also be included in the concept of shadow orders, and it is impossible to sign a formal financial investment agreement.
Chapter completed!