Tuesday, October 24th.
Nine o'clock in the morning, Henglong Building Top Floor Conference Room.
Zhao Chen sat in the main seat and glanced at the people present.
Chen Wei, Chen Xi, Zhang Qingxue, Song Zhongping, Chen Qiming, Liu Mingyu, and Su Wantang sitting next to him.
"This meeting today is about one thing." Zhao Chen said, "Those three projects related to Lin Wanqing."
He looked at Chen Wei:
"You are responsible for the introduction."
Chen Wei stood up and walked to the whiteboard.
She picked up the pen, drew three circles, and marked them 1, 2, and 3.
"These three projects were Haoyu's previous cooperation with Lin Wanqing's company. One has a good profit expectation, and the other two will obviously suffer losses."
She clicked on circle No. 1:
"If Lin Wanqing can make additional investment in proportion to this project and proceed normally within three months, the money will be paid back in the middle of next year.
Net profit is expected to be around 150 million."
She drew two lines on circles 2 and 3:
"These two projects have huge problems.
The total initial investment is 250 million, with Lin Wanqing accounting for 20% and investing 50 million, and Haoyu accounting for 80% and investing 200 million.
The original expected revenue was 800 million, the cost was 700 million, and the profit was 100 million."
She paused:
"But now that the market has changed, after recalculation, the revenue may only be 620 million, the cost of 700 million will remain basically unchanged, and the loss will be 80 million."
Chen Qiming pushed up his glasses:
"In other words, the project itself has no investment value?"
Chen Wei nodded:
"Yes. According to this expectation, the current value of the project Fair Value is only 170 million.
The original shareholder's investment of 250 million has already lost 80 million."
She looked at the people present:
"What's even more troublesome is that Lin Wanqing neither invests money nor responds, it just drags on.
All three projects have been suspended."
Song Zhongping frowned:
"What does she want to do?"
Chen Wei shook his head:
"Don't know. But we have to solve this problem."
Zhao Chen looked at her:
"What do you suggest?"
Chen Wei took a deep breath, walked to the whiteboard, and started writing numbers.
"My suggestion is to forcefully start refinancing."
She drew a line under circles 2 and 3:
"For these two loss-making projects, according to the agreement, if one party refuses to make additional investment, the other party has the right to request revaluation and introduce new funds."
She wrote down the first set of numbers:
Original investment: 250 million (Lin Wanqing 50 million, Haoyu 200 million)
Original expected revenue: 800 million → Current expected revenue: 620 million
Project current Fair Value: 170 million
She turned her head:
"But 170 million is an optimistic estimate.
Taking into account the losses caused by project shutdown, the risk of contract default, and the possibility of further market decline,
We can entrust a third party to evaluate and lower the valuation to a lower value - for example, 100 million."
Meeting Room was quiet for a second.
Song Zhongping took a breath:
"100 million? 60% discount?"
Chen Wei nodded:
"Yes. The reasons are very good - the revenue dropped by 22.5%, the financial cost of the half-year shutdown is 20 million, the owner may face a claim of 15 million for delayed delivery, and the damage to the regional reputation requires additional marketing investment.
Add these together, and the valuation is reduced to 100 million, which is completely reasonable."
She went on to write:
New valuation: 100 million
"In this way, the original shareholders will have to bear an asset impairment of RMB 150 million.
Lin Wanqing holds 20% and bears 30 million, leaving only 20 million of her 50 million equity.
Haoyu accounts for 80% and bears 120 million, leaving only 80 million of the 200 million equity."
Chen Qiming Quick mental arithmetic:
"In other words, she has already lost 30 million before refinancing started?"
Chen Wei nodded:
"Yes. This is the price she pays for dragging it on."
She went on to write:
Haoyu reinvest: 100 million
New valuation: 100 million + 100 million = 200 million
Haoyu total equity: 80 million (original) + 100 million (new) = 180 million → 90% of shares
Lin Wanqing Equity: 20 million → 10% of shares
She put down her pen and looked at everyone:
"After this operation, Lin Wanqing's actual loss is 30 million.
Her 50 million ended up with only 20 million in equity, which was diluted to 10%."
She paused:
"And Haoyu spent 100 million new funds to obtain 90% of the equity of the project.
If the project can be revitalized in the future, this part of the equity will be ours.
100 million Fair Value is actually equivalent to another provision of 70 million losses.
In other words, if the future revenue exceeds 550 million, Haoyu's book loss will be reduced by 9 million for every time it exceeds 10 million."
Chen Xi Raise your hand:
"What if the final revenue is more than 620 million? For example, the market picks up and the revenue reaches 700 million?"
Chen Wei smiled, obviously well prepared.
She went on to write:
If the final revenue reaches 700 million:
Total revenue 700 million - cost 700 million = break even
"The project itself neither makes any profit nor loses money.
But don't forget, the capital cost of Haoyu's new shares is extremely low."
She wrote:
In the case of 620 million revenue:
Haoyu will withdraw 70 million × 90%, 63 million.
The overall loss will be only 120 million-63 million = 57 million.
Lin Wanqing company will withdraw 7 million yuan, resulting in an overall loss of 23 million yuan.
In the case of revenue of 700 million:
Haoyu will withdraw funds of 150 million × 90% = 135 million.
It will also cover the previously expected loss of 120 million yuan and achieve a profit of 15 million yuan.
While Lin Wanqing was able to withdraw 15 million, the actual loss was also 15 million.
"In other words, as long as the expected revenue of the project exceeds 550 million, additional investment by Haoyu is appropriate."
Chen Wei raised his head and said word by word:
"Even if the project miraculously turns a profit and reaches the break-even point, Lin Wanqing will still lose at least 15 million."
She paused and added:
"More importantly, what we got in exchange was project assets worth 200 million.
When subsequent projects are truly profitable, our profits will be even greater."
Song Zhongping took a breath:
"This trick... is too cruel. She lost money, we won the project, and she can only stare."
Zhang Qingxue pushed up his glasses:
"The key is legality and compliance. There is a refinancing clause in the agreement. As long as the procedures are followed correctly, it will be useless wherever she goes."
Chen Qiming added:
"And her company's cash flow is already very tight.
A loss of 15 million yuan, plus capital costs, is enough for her to drink a pot."
Chen Xi laughed:
"So she's in a dead end now—if she invests money, she can't get it out;
If we don't invest money, we will refinance at a valuation of 100 million, and she will still lose. No matter what she chooses, she will lose."
Zhao Chen said nothing in the song.
He leaned back in his chair and his eyes fell on the numbers.
This is the price Lin Wanqing pays for dragging it on.
He looked at Chen Wei:
"Where are the profitable projects?"
Chen Wei turns to circle 1:
"Profitable project, total initial investment is 200 million, Lin Wanqing 40 million accounts for 20%, Haoyu 160 million accounts for 80%. Estimated profit is 150 million, with good prospects."
She went on to write:
"If her funds are not in place, we can use the original investment amount of 200 million as the basis and invest another 200 million to increase capital."
New valuation: 200 million + 200 million = 400 million
Haoyu total equity: 160 million + 200 million = 360 million → 90% of shares
Lin Wanqing Equity: 40 million → 10% of shares
"In the future profit of 150 million, Haoyu will get 135 million, and Lin Wanqing will get 15 million."
She looked at Zhao Chen:
"Her 40 million is still there, but she can only get 15 million in profits, with a return rate of 37.5% - it looks good, but it is much less than what she should have received.
Moreover, this does not include his capital cost, and he no longer has any say in the project."
Zhao Chen nodded.
He looked at Zhang Qingxue:
"Is there any legal problem?"
Zhang Qingxue pushed up his glasses:
"No problem. As long as we send a formal notice in advance and give her a reasonable period of time, if she doesn't respond, we can start the process.
It's clearly written in the agreement."
Liu Mingyu asked in a low voice:
"Then what if she doesn't cooperate?"
Everyone looked at Zhang Qingxue, wanting to see how she could avoid conflicts legally.