Chapter 1338: Wheelock Group!
Very soon, all the information about Wheelock was collected.
Although the Wheelock Group is the only survivor of the old British Big Four, in reality, its prestige has long since faded.
The current Hong Kong is no longer the small pond it once was.
After Xia Yu's meticulous construction, Hong Kong has undergone rapid changes. The economy is booming, and the financial market is full of vitality.
What's more, Hong Kong is free of political instability.
Large companies from Hong Kong, Macau, and Southeast Asia have been listed one after another, and in particular, the listing of many industry leaders under Xia Yu's Jiuding Group has long since eclipsed the Wheelock Group's glory.
And due to Xia Yu's butterfly effect, the Wheelock Group is also very different from its previous incarnation.
The most obvious point is that over the past few years, the Marden family and the Zhang family have not lost confidence in Hong Kong. Under the leadership of the Marden family, Wheelock Shipping has taken over the ships of many companies, especially a not insignificant number of ships from Bao Yugang's original Global Shipping Group.
Today, the total carrying capacity of the ships owned by Wheelock Shipping has reached 3.37 million tons, and there are still quite a few ships on order that have not yet been delivered, with a total order value of 890 million Hong Kong dollars.
In the end, however, the economic prosperity of Hong Kong only slightly masked the crisis in world shipping, and the value of the ships continued to shrink.
Today, the fixed assets of Wheelock Shipping's fleet are already worth about 4.15 billion Hong Kong dollars.
If the current number of ships were to be put in place nearly five years ago, they would be worth at least HK$10 billion!
John Madden continued to add new ships from 1978 to 1983, but it wasn't until the end of last year that he realised the shipping market had reached a turning point and the crisis finally exploded. He stopped adding new ships.
A series of mergers and acquisitions in the past have also caused Wheelock Shipping to rack up debts of HK$3.59 billion!
As time passes, the price of ships continues to fall, and Wheelock Shipping's fleet of fixed assets is getting closer and closer to the company's debt.
Currently, Wheelock Shipping's market value is HK$10.38 billion, which is considered a super-large company in the HK$10 billion range.
However, the company's total assets are only HK$7.09 billion, and its net assets are HK$3.5 billion.
However, most of this net assets is the value of equity holdings in other companies.
Wheelock Shipping Company is the core of the Wheelock Group, which does not have a special holding company like the Jardine Matheson Group.
In addition to itself, the Wheelock Group also owns five listed companies: United Dockyards, Hong Kong Property Trust, Lane Crawford Retail, Realty Development Corporation and Hong Kong-Zhuhai-Macao Bridge.
Of course, many of these listed companies have cross-shareholdings, for example, United Dockyards owns 7.2% of Wheelock Shipping, and Property Trust owns 6.4% of Wheelock Shipping.
Wheelock and Company, in turn, holds 27.8% of the equity of United Dockyards, 38.2% of the equity of the Real Estate Investment Trust, 42.7% of the equity of Lane Crawford Retail, 44.5% of the equity of Federal Realty, and 27.9% of the equity of the Xiangjiang Undersea Tunnel Company.
United Dockyards was formed by the merger of Taikoo Dockyard and Whampoa Dockyard, but both the Swire Group and Hutchison Whampoa have successively liquidated their equity and exited in the 1970s. Now, apart from the dockyard, its assets are just ships, so it can be said to be a supporting company of Wheelock Shipping and a junior in the industry.
The property trust company is the financial core of the Wheelock Group, and John Madden has repeatedly borrowed funds from this company.
Lane Crawford Retail is rooted in the retail sector. In addition to Lane Crawford hypermarkets, the company also has retail brands such as Le French and Super City.
Commonwealth Property is the largest real estate pillar company of the Wheelock Group.
The Cross-Harbour Tunnel Company can be said to be the one fish that got away in the transportation industry. The company owns the exclusive right to the Cross-Harbour Tunnel, and the most profitable tunnel is the Hung Hom Tunnel, which is the busiest and most heavily used tunnel.
Among the six listed companies, Wheelock also holds equity in many unlisted companies or subsidiaries.
These companies together form the Wheelock Group.
Of course, the investigation report shows that although Wheelock Shipping's market value is still as high as tens of billions of Hong Kong dollars, in fact, Wheelock Shipping's market value has been declining, contrary to the general market.
Wheelock Shipping's tens of billions of market value is not supported by the company's shipping business, but by the dividends from other companies.
In fact, in terms of shipping business, Wheelock's financial report for the first half of this year shows that its shipping business suffered a loss of HK$73.59 million.
And this is just the loss from operations.
More importantly, the fixed value of the fleet has shrunk, and Wheelock is deliberately covering this up.
The purpose of this is very clear: to maintain Wheelock's stock price.
In terms of company profits, Wheelock Shipping should be considered more of a financial company, as the profits are basically dividends from other companies.
The hidden dangers of Wheelock Shipping have also been noticed by the capital market.
At present, Wheelock Shipping still has HK$890 million in unpaid orders for new ships. Given the company's situation, it cannot get rid of this order, and will have to take out a bank loan or borrow from other financial companies.
Together with the 30% down payment, the total price of the undelivered ships at the time of signing the contract was HK$1.271 billion.
However, the value of these new ships has now shrunk to HK$940 million, a loss of HK$330 million.
Once delivered, it means that Wheelock Shipping will add HK$890 million in debt, raising the company's debt to the HK$5 billion mark.
And Wheelock Shipping's net assets will decline further.
If the value of the ships continues to decline, the fixed assets of the fleet will fall below the company's liabilities, and the banks will take enforcement measures.
Unless Wheelock Shipping Company comes up with cash or other assets to increase the collateral, the banks will enforce asset disposal.
So it is now clear that the Wheelock Group is on the verge of being dragged down by Wheelock Shipping Company.
Once the shares of other companies are transferred to raise funds in order to save Wheelock Shipping Company,
Wheelock Shipping Company will be able to continue to survive, but the Wheelock Group will begin to fall apart.
'The net assets are only 3.5 billion Hong Kong dollars, and the market value is about three times the net assets, which is still a bit high.'
'We need to suppress the stock price again first, otherwise once an acquisition is initiated, the stock price will definitely skyrocket, and there is no need to spend more money than necessary.'
'Well...let the Guangming Fund do it, it's relatively less conspicuous.'
After making the decision, Xia Yu made a note and asked Fok Kin-ning to arrange it.
Very soon,
there were more pessimistic analyses of the world shipping market in the media. And to avoid arousing suspicion, the initial news came from a British newspaper, which was reprinted by Hong Kong newspapers.
Then the Hong Kong media analysed the major shipping companies in Hong Kong.
As some institutions shorted Wheelock Shipping Company, the market value of Wheelock Shipping Company began to fall rapidly.
In just half a month, the market value had shrunk by nearly two-thirds, from HK$10.38 billion to HK$8.45 billion.
Just as the Hong Kong branch of Guangming Fund was preparing to buy, a new competitor suddenly appeared!