The birth of the Hong Kong Island family

In mid-September, Lin Zhichao came to Nova Corp in Canada.

Nova Corp is a chemicals and gas transportation group that owns an important asset - Husky Petroleum Company.

Headquartered in Calgary, Alberta, Canada, Husky is one of Canada's major independent energy companies. It owns the exploration rights of more than 5,000 oil and natural gas production wells in Canada, and also holds heavy oil refineries. 26.67% equity and 343 gasoline stations.

This meeting was naturally about Hutchison Whampoa's acquisition of Husky.

Generally speaking, if someone else (Li Jiacheng) acquires Husky, it will usually take several years of investigation before they dare to make a real decision. For Lin Zhichao, Husky decided to acquire it with almost no thought.

Of course, he also pretended to inspect the project more than two years in advance and got to know Blair, the president of Husky Company, and had a good personal relationship. In this acquisition, it was Husky President Blair who actively invited Lin Zhichao to make the acquisition, and it was not the guidance of Canadian Imperial Bank of Commerce and Nova Corp.

One advantage of this kind of acquisition is that there will be no turmoil in the management, and 'locals manage locals', which has obvious advantages.

As for Lin Zhichao, he knows that Husky is not only the proud work of Li Jiacheng in his previous life, but also knows that oil will go through a cold winter period that lasts for several years, and this cold winter period will not kill Hutchison Whampoa. life, but brings huge development prospects. Taking advantage of this cold winter period, what Husky needs to do is mergers and acquisitions to expand its oil reserves and scale.

"Mr. Lin, welcome to Nova Corp!"

"Mr. Thomson, nice to see you again!"

At Nova Corp, everyone greets me warmly. Participating in the talks this time were Canadian Imperial Bank of Commerce, Hutchison Whampoa and Nova Corp, so it was a three-party meeting.

Canadian Imperial Bank of Commerce is a loyal partner of Lin Zhichao's family. Lin Ruihuan also holds 9% of its shares and serves as a director (with voting rights). This time, Canadian Imperial Bank of Commerce also plans to purchase 5% of Husky Petroleum's equity, which is regarded as a strategic investment.

After the group arrived at the conference room, representatives from the three parties conducted business negotiations. Of course, the team had already communicated beforehand, and today we are here to finalize the final resolution.

Thomson is the president of Nova Corp, a family business. He said: "Mr. Lin's business methods are also praised by many people in the West. If Husky has your leadership, I believe there will be great success." development opportunities!”

Henrik also said jokingly: "Mr. Lin is also very discerning. In the London oil futures market, he defeated the local consortium!"

That battle was really awesome!

Based on the strength of the Rothschild family, if it had not coincided with the outcome of the OPEC meeting, the Rothschild family would have been able to cause London Bren oil futures to skyrocket for a while, and Lin Zhichao's funds would have been very passive by then. After all, it is just a Bren oil futures, so a short-term surge is nothing. But as long as there is a sudden surge, Lin Zhichao's investment will easily be liquidated, and it may not be too late to cover the position.

Lin Zhichao said modestly: "Thank you! I personally think that oil will not improve in the short term, so after acquiring Husky Petroleum Company, the real feasible way is to use Husky Petroleum Company to continue to acquire oil reserves and expand scale, waiting for oil to pick up.”

Thomson nodded. The sale of Nova Corp's shares this time was not all sales, but only 57% of the shares.

Everyone agreed: Hutchison Whampoa will acquire 43%, Lin Ruihuan will acquire 9% personally, Canadian Imperial Bank of Commerce will acquire 5%, and the remaining 43% will continue to be held by Nova Corp.

In this way, the holdings of Nova Corp and Hutchison Whampoa can not only reduce risks (profit from selling shares), but also continue to invest in Husky (unknown that they cannot wait until dawn).

"The acquisition of oil reserves will continue to increase Husky's debt risks. How does Mr. Lin plan to respond?" Thomson asked.

Lin Zhichao told Ma Shimin that Nova Corp still holds 43% of the shares. Although it has ceded leadership to Hutchison Whampoa, it must care about its own interests and hopes that Hutchison Whampoa can lead Husky to find a way to break through.

Ma Shimin nodded, and then said seriously: "The purpose of acquiring oil reserves is to help oil recover in the future and increase the company's assets. In fact, we have analyzed that oil will not improve in the short term, and may last for several years. Therefore, in order to cope with In terms of debt, we can probably do the following: 1. Order mining equipment for traps, increase the amount of oil extracted, and reduce debt after selling it; 2. Our subsidiary company, Hong Kong Electric Company, has a development that is closely related to oil. relationship, we will strengthen Husky’s cooperation in the future.”

Speaking out the future policy outline will reassure partners that Hutchison Whampoa has the ability to lead the company through difficulties.

Thomson is very happy that Hutchison Whampoa's strategy is still feasible, buying oil reserves at low prices, increasing mining efficiency and production, and relying on Hong Kong Electric's cooperation (demand).

"Okay, I trust Mr. Lin's team very much and am willing to work together."

Afterwards, it was easy to talk.

Husky's assets are valued at US$788 million, or HK$6.15 billion.

Lin Ruihuan and Hutchison Whampoa acquired a total of 52% of the shares, which is HK$3.2 billion.

Hutchison Whampoa will spend 2.65 billion this time. Of course, this amount of money is nothing. This year (1986) Hutchison Whampoa's profit will exceed 2 billion.

‘Whampoa Garden’ alone was able to bring more than 5 billion in profits to Hutchison Whampoa from 1985 to 1989, which is equivalent to bringing 1 billion Hong Kong dollars in profits to Hutchison Whampoa every year. Of course, the profits from 1985 to 1986 were still relatively small. First, Lin Zhichao controlled the sales volume. Second, the price was not high. It is expected that Hutchison Whampoa's profits next year will exceed 3 billion.

Therefore, money is not a problem for Hutchison Whampoa!

The news of Hutchison Whampoa's acquisition of Husky Canada was quickly reported by the media in Canada, the United States, and Hong Kong, and shocked everyone.

According to Canadian policy, foreigners cannot acquire energy companies that are "financially sound." However, Lin's eldest son, Lin Ruihuan, has Canadian citizenship and has circumvented this restriction and gained control of Husky.

After Lin Zhichao signed a contract in Canada, he also accepted an exclusive interview with the monthly magazine "Canadian Business".

Accepting an interview is to prevent some people from making a fuss about this matter. He needs to show an investment attitude.

The reporter responsible for interviewing him was a forty-year-old reporter named Richard. Although he was experienced, it could be seen that he admired Lin Zhichao. The whole interview scene showed respect.

"Mr. Lin, do you need to prepare?"

"Do you need it? I'm here anytime!"

"Okay, let's start right away!"

Richard first asked: "Mr. Lin, may I ask your age?"

Lin Zhichao said: "Born in 1928, he is 58 years old this year!"

Richard said in surprise: "I can't believe it! You look so young, and as far as I know, you have been famous in the business world for more than thirty years, and you started from scratch."

Even some of the staff nearby couldn't help but be surprised.

Lin Zhichao said with a smile: "I am an optimist, so a good mood will make you younger, and it can also make your thinking more useful - to solve some work and life issues."

Richard said: "It's a very philosophical statement. I will note it down. As far as I know, you are a self-made rich man. Your wealth is not inherited from your father's generation, is that right?"

Lin Zhichao said: "My father was a teacher, but he passed away when I was 14 years old. Since I had no money to study, I dropped out of school to help my mother farm. Then I went to Hong Kong at the age of 18 to make a living. Of course, it cannot be said that I started from scratch. ’, many people have helped me, otherwise I wouldn’t be where I am today!”

Richard said: "You are so humble!"

Next, let’s get to the point.

Richard said: "Your acquisition of Husky this time coincided with the downturn in world oil prices, so what are your views?"

Lin Zhichao said:

"World oil prices will not increase much in the short term, but they are promising in the long term. Moreover, the development of Hong Kong Electric Light Company is closely related to oil (Hong Kong has eliminated coal-fired power), so this investment is beneficial to Hong Kong."

“In order to seek suitable energy investment opportunities, I spent several years investigating in Europe and the United States. There are two main reasons why I am attracted to Husky. One is that I personally have a special personal affection for Canada; I have a very good personal relationship with Mr. Blair, the president of Husky, and I trust his guidance.”

The interview went smoothly, and the acquisition did not cause much public protest. After all, it was at a low ebb for oil.

The city of Calgary, also known as 'Calgary', is the fourth largest city in Canada. In 1941, abundant oil and natural gas were discovered here, and the city has developed rapidly since then. The Canadian headquarters of many energy companies are located here, so Calgary is Canada's energy center and the second largest energy center in North America.

The Husky headquarters is located here!

Calgary is located at the foot of the Rocky Mountains. With the magnificent snow-capped mountains that never melt all year round as the urban background, Calgary has been rated as the fifth most livable city in the world for many years. The sun here is very abundant and there is no continuous rainy season. It is the third most comfortable city in Canada after Victoria and Vancouver.

Lin Zhichao and others stayed at Husky headquarters for a while, mainly reaching some development plans with Husky management. Hutchison Whampoa has control, so it does not allow Husky management to decide on major development matters on their own.

What's more, without the support of major shareholders, how can Husky's management have the courage to develop significantly?

Lin Zhichao and Blair can be regarded as old friends for two or three years, so everyone had a pleasant conversation.

For the management headed by Blair, they are happy to see that the new owner plans to take advantage of the oil downturn to acquire Canadian oil wells (exploitation rights) at low prices.

Of course, acquiring oil wells will inevitably increase Husky's debt ratio, so it has to increase mining output and sell it to repay the debt. Therefore, we have made plans to purchase a complete set of mining equipment, gradually increase mining output, and sell to Hong Kong. Mainly sold to HK Electric.

In fact, there is another idea in Lin Zhichao's mind, which is to take advantage of the low price of oil in recent years to make massive acquisitions, even if Husky's debt is high; the important thing is to make Nova Corp feel--I Unable to bear it anymore, he wanted to sell all the remaining shares to Lin Zhichao.

By then, Lin Zhichao would have mastered Husky!

Therefore, it is expected that this investment will take at least six or seven years to see hope. I believe Nova Corp cannot wait until that time.

In the office, Lin Zhichao and others sat together and talked, including Lin Ruihuan, Ma Shimin, and Blair.

"President Blair, the next step depends on your management! I only have one request, and that is to absorb reserve assets at a low price! However, considering that oil has only reached a low ebb this year, there is no need to be too hasty."

Blair nodded and said, "I understand what Mr. Lin means!"

Lin Zhichao continued: "Next year, I may send a professional financial technology master to Husky to see if he can help."

Lin Ruihuan and Ma Shimin knew that they were talking about Huo Jianning.

Blair said curiously: "If you can trust Mr. Lin so much, you must have a great record, right?"

Lin Zhichao smiled and said: "Yes. This manager is a director of our Cheung Kong and Hutchison, named Huo Jianning. His main achievement is that our Cheung Kong invested in Japan. Starting in 1983, our Cheung Kong began investing in real estate in Japan. The peak During this period, we used 1 billion U.S. dollars of principal to leverage 4 billion U.S. dollars of real estate investment. As the yen appreciated and the bank exchange rate fell, our investment there began to show results; in addition, starting from the second half of this year, Japan Real estate stock markets have begun to rise sharply."

He personally introduced Huo Jianning's achievements and did not hesitate to place all his credit on Huo Jianning, instantly gaining Blair's trust.

"So, Mr. Huo Jianning must be very suitable to join Husky. After all, we will also start to make large-scale debt acquisitions. It is very necessary to have a financial master!"

Lin Zhichao nodded. In fact, he did not ask Huo Jianning to stay in Canada, but asked Huo Jianning to be in charge of Husky. After all, Ma Shimin is the president of Hutchison Whampoa, so it is impossible for him to devote too much energy to a project.

Therefore, whether it is the energy investment of Husky or the subsequent telecommunications investment, Huo Jianning is the direct manager.

After the Husky incident was over, Lin Zhichao flew back to Hong Kong.

On the plane, Ma Shimin also followed him back to Hong Kong. As for Lin Ruihuan, he flew to Hong Kong alone. Lin Zhichao still insisted that "father and son are not on the same plane."

"The major shareholders of Pearson Group are opposed to our further cooperation. This has long been expected by me!" Lin Zhichao said to Ma Shimin on the first floor of the plane.

Ma Shimin was stunned. If the boss was so confident, why didn't he stop it?

But he quickly understood and said: "What the boss means is to find a suitable opportunity to sell Pearson's stocks and make a profit!"

Lin Zhichao nodded and said, "Let's wait another year!"

Pearson is an education group that owns world-renowned brands such as Longman, Financial Times, and The Economist. To put it bluntly, it is a cultural publishing group and a symbol of British culture. Although it is a diversified group, it is not something that Hutchison Whampoa can win, so Ma Shimin is a little too optimistic!

But Lin Zhichao did not stop him. To put it bluntly, he felt that the investment was not a loss, and it could also send a signal of investment in the UK. There was nothing inappropriate about it.

Ma Shimin continued: "Although we didn't make much progress by investing in Pearson, we can be considered to have established a foothold in the UK. Next, I plan to seek breakthroughs in telecommunications, such as acquiring the equity of Dadong Telegraph Company."

Lin Zhichao immediately said: "Don't make acquisitions now. Wait for the opportunity, at least until Pearson's stock sells off. Investing in overseas telecommunications is right, but you still need to wait for the opportunity."

Ma Shimin nodded and said: "This acquisition of Husky is a big step for Hutchison Whampoa to enter overseas. It is also very good to take a whole year off. We will take advantage of this time to carefully examine and analyze. Find better investments.”

In comparison, Ma Shimin completely admires Lin Zhichao, but he may not have been very convinced of Li Jiacheng in his previous life. After all, the heights are different.

The reason why Lin Zhichao asked Ma Shimin to wait and invest in Dadong Cable and Telegraph Bureau was because he knew that it was also difficult for Hutchison Whampoa to enter its board of directors, so he could only invest 4.99% as a strategic investment. However, the best time is of course after the August 7 stock market crash.

Pearson and Dadong are all investment ideas from management such as Ma Shimin. Lin Zhichao will not deny them, but he will let them know when to sell for greater profits and when to buy at the lowest cost.

But then, Lin Zhichao said: "The development of Watsons Group is definitely Hutchison Whampoa's most advantageous weapon. It has retail (Watsons, PARKnSHOP and other brands), manufacturing (pharmaceuticals, cosmetics, etc.), food (various sodas, etc.) , Wan Chai Terminal, etc.) and other industries, already have sales of HK$6 billion a year. Therefore, I think we should continue to strengthen its development scale, especially the Southeast Asian market.”

It is necessary for Ma Shimin to calm down!

Moreover, Watsons Group is an enterprise that is underestimated by everyone, and Lin Zhichao is very clear that it is very necessary to develop Watsons. Currently, Watsons only has more than 200 stores, which is far from the tens of thousands at the peak of its previous life.

Therefore, it is necessary to speed up the layout of Southeast Asia, especially in the coming time, the economy of Southeast Asia will grow rapidly.

"Okay, I understand what the boss is thinking!"