Chapter 1367: OOCL for Help

The deployment of the 'Plaza Accord' is being implemented in an orderly manner, and Xia Yu's burden has become much lighter.

In normal days, apart from maintaining his health and creating villains, he is becoming more and more relaxed at work.

But on 28 August, Dong Chenghui, the current head of the Dong family, paid him a visit.

Dong Chenghui was one of the founders of the Southeast Asian consortium, and of course, due to his strength, he was only a director of the Southeast Asian International Holdings Company.

'Chairman, I've come to bother you!'

'Welcome, I'm delighted that you've come to chat with me!'

'Why did you bring a gift? You're being so polite!'

'It's nothing, just some fruit I grew in the backyard. It would cost hundreds of dollars to buy it outside.'

'Haha, it's the thought that counts. Fruit that you grew yourself is hard to come by outside!'

'Come in!'

Xia Yu warmly greeted Dong Chenghui and took the fruit he had brought, leading him into the living room.

After they had taken their seats, the maid immediately went to make tea, while Xia Yu opened the fruit Dong Chenghui had brought, which contained some longans, late-maturing lychees and mangoes.

He picked off a longan, peeled it and threw it into his mouth. After chewing a few times, he nodded and exclaimed, 'Not bad, the juice is full, sweet and bursting with juice, delicious.'

Although he knew that Xia Yu was exaggerating, Dong Chenghui still had a broad smile on his face. He joked, 'Looks like I'll have to sell the rest. I'll advertise it as "Dong's longans, even the God of Wealth says they're good", and price them at 10,000 Hong Kong dollars a pound. I wonder how many I can sell.'

Xia Yu laughed, teasing, 'Why don't we partner up and take them to an auction house to hype them up a bit, and split the profits 50-50?'

Dong Chenghui immediately clapped his hands and said, 'Then the price will skyrocket, and a single tree will have to sell for millions!'

'Hahaha...'

The two men burst out laughing.

Just then, the maid had finished making the tea, and Xia Yu made a gesture of invitation: 'Mr Dong, please have some tea. This tea is my treasure, and today is the only day you're here, otherwise I wouldn't have dared to serve it.'

'Oh? Then I'll have to taste it properly!'

After saying this, Dong Chenghui lifted the teacup, took a deep breath, then took a sip, and after smacking his lips, he exclaimed, 'Fragrant as orchid and osmanthus, the taste is like sweet rain, good tea!

Then, he couldn't help but take a few more sips.

Xia Yu smiled, and also lifted the teacup and sipped slowly.

Drinking tea alone is pleasant, but drinking it with someone is a matter of mood.

However, no matter how Dong Chenghui tried to hide it, Xia Yu could see the worry in his eyes.

No one comes to the temple for nothing.

Although the two were allies and friends, Dong Chenghui would not have made a special trip if it were not important.

If he guessed correctly, it must be about Orient Overseas Container Line.

Xia Yu put down his teacup and asked, 'Mr Dong, you look worried. What's wrong? Have you encountered any difficulties?'

Dong Chenghui also put down his teacup, finally giving up his pretence. He looked worried, let out a long sigh, and said to Xia Yu, 'Chairman, you are right, my family is indeed in crisis. I have come to you for help.'

'Don't worry, take your time and tell me. I will definitely help!' Xia Yu said solemnly.

Dong Chenghui's face showed a look of gratitude, and his taut nerves eased slightly.

He said slowly, 'Chairman, ever since I took over the family business, the pressure on me has never eased in all these years. I have been working hard, using the profits from the family's other businesses to support the development of the shipping company, always hoping that the downturn in the world shipping industry would pass.

'But it's been three years, and the general situation has not improved, but has continued to deteriorate. This time, I really can't hold on any longer.'

'OOCL's total debt is as high as 2.85 billion US dollars, and 740 million US dollars of that is due within a month. In addition, by the end of this year, another 890 million US dollars of debt will mature, and another 270 million US dollars in new ship payments will have to be made before December. The rest will all mature next year.'

'But even with the business given by the consortium, the current freight rates are too low, and the value of the ships depreciates too quickly, so that every month is in a state of loss.'

'I... sigh...'

At the end of the day, Dong Chenghui hung his head, his face full of powerlessness.

Since being forced to take over as head of the family in 1982, he has experienced the difficulty of being the head of the family. He has been borrowing from one place to pay off debts in another, but the world shipping market has been on a downward trend, and every time he thought it had bottomed out, it continued to go down, so he has fallen deeper and deeper into debt.

Before, he was still able to turn things around, and no one outside the company knew anything. After joining the Southeast Asian consortium, the business situation improved due to the resources within the consortium, but there was a limit. With a large amount of debt about to mature, his days were numbered.

As for Dong Chenghui, Xia Yu knew him well. He could be described as a tough person, but he was tortured by the pressure to such an extent, which shows how much Dong Chenghui was suffering.

'Mr. Dong, which banks did you borrow money from?'

Xia Yu thought for a moment and asked the most crucial question.

Dong Chenghui immediately said, 'If it's from a Hong Kong or Southeast Asian bank, then it's possible to turn things around.'

'But my loans are mainly from banks in island countries, including Fuji Bank, Mitsubishi Bank, Mitsui Bank, Taiyo Kobe Bank, etc., because I used to place orders with shipbuilding companies in island countries and take out loans with the help of their connections. And the interest rates in island countries are also lower, less than a quarter of those in Hong Kong.

'Last year, the world's largest and the island's largest shipping company, Sanko Steamship, went bankrupt after incurring more than 4 billion US dollars in debt and suffering consecutive years of losses. This made the island's banking industry see the current situation of the shipping industry clearly and tighten their lending to shipping and shipbuilding companies.'

'Once my loan matures, the island's banks will definitely not renew it for me, and here in Xiangjiang, I have asked many local and foreign banks, and they have been very vague about new loans.'

In his situation, it is indeed difficult.

If it is an old debt with a local Hong Kong bank, if you can't pay it back, you can still use your connections to transfer the debt, and the bank will not push too hard to avoid the company going bankrupt.

But if it is a bank in the island country, it is hard to say. They don't trust Dong Chenghui as much as the banks in Hong Kong, and they may not necessarily give face. Most likely, they will stop losses in time, and if they can recover some assets, that would be fine.

'Mr Dong, according to the current situation, if Orient Overseas Container Line files for bankruptcy, it can wipe out all debts. I can also help you start up again. This is the best solution for you.'

Xia Yu thought about it for a while and offered what he believed to be the best advice for Dong Chenghui.

Dong Chenghui smiled bitterly and said, 'Chairman, I have considered this method and it is indeed the best solution, but I can't get past this hurdle in my heart.'

'OOCL has thousands of employees, many of whom have been with the company since my father's time. There are thousands of families behind them.'

'My company has too much bank debt. If bankruptcy is filed, the bank debt will be repaid first. In recent years, the value of the ships has shrunk significantly, as has the company's stock price. There are not enough assets to repay the bank debt.'

'So at that time, there will be other debts, not to mention employee wages and pensions, resettlement fees, etc.'

'There are also a large number of shareholders who will lose their capital.'

'I can do anything to the banks on the island, but I can't bear to do anything to their innocent compatriots...'

After listening to Dong Chenghui's words, Xia Yu instead revealed a smile, greatly moved in his heart.

It was at this time that he still held fast to his bottom line, and this sense of responsibility was hard to come by.

In that case, he had to help Dong Chenghui even more.

'Dong... dong... dong...'

Xia Yu tapped his fingers on the table, frowning as he thought.

Dong Chenghui's heart also lifted, and his fists clenched unconsciously.

After a long while...

Xia Yu looked at Dong Chenghui and said, 'Mr. Dong, I have an idea.'

'Please go ahead, Chairman!' Dong Chenghui leaned forward and said hurriedly.

Xia Yu said slowly, 'Regarding the debt of the island bank and the remaining payment for the ship that is due, which amounts to as much as 1.9 billion US dollars, this debt is too much. Converting the debt is a stopgap measure that does not solve the problem at root. I suggest repaying some of it and converting some of it. For the debt that is to be converted, I will act as a go-between for Orient Overseas Container Line and the 740 million US dollars of debt within a month is definitely no problem.'

'And in the current global shipping market, to be honest, my think tank's analysis is that it's not over yet. At the very least, freight rates will continue to fall for another year. Based on current freight rates, they will fall by more than four times, and the price of ships will continue to shrink further.'

'So I suggest that you now clean up part of the fleet and return the funds to repay bank loans.'

'Then only leave part of the fleet, and lease back the remaining part of the fleet after transferring it at a low price, in order to significantly reduce the company's debt.'

'After the shipping market bottoms out next year, you can buy a fleet again and set sail according to the actual situation.'

'In addition, I think you must have taken the shares of Orient Overseas Container Line to secure a mortgage. The current stock price must be very low. I suggest that you apply for delisting to facilitate the company's strategic adjustment.'

Dong Chenghui was both moved and shocked. He was moved by Xia Yu's willingness to lend a helping hand, and he was shocked by Xia Yu's judgment that there was still so much room for the shipping market to fall.

If it really falls again, if Orient Overseas Container Line stays the same and survives this crisis, it will be hard to survive next year, after all, the debt due next year is also more than a billion US dollars.

Thinking about this, Dong Chenghui couldn't help but break out in a cold sweat.

No, I really should follow Xia Yu's advice and focus on stability.

After repeated expectations and disappointments over the past few years, he was completely unable to judge the trend of the global shipping market, and he would rather believe in Xia Yu's analysis.

'Chairman, I'll take your advice and go back and start cleaning up the ships.'

'I'll need your help a lot more in the future. If you think the shipping market has hit bottom next year, please give me some pointers.'

After saying this, Dong Chenghui stood up and, before Xia Yu could stop him, bowed deeply to Xia Yu in a very sincere manner.

Xia Yu shook his head helplessly and laughed, 'Of course, we are allies after all, how could I not help?'

'Thank you, Chairman!'

'By the way, Chairman, some shareholders in my company want to withdraw now. Are you interested in taking over some of the shares? The transfer price should be very low.'

After thanking Dong Chenghui again, he suddenly thought of something and immediately said to Xia Yu.

Now that Orient Overseas Container Line has reached its lowest point, there is already an opportunity to reverse the trend. Inviting Xia Yu in is also a way of giving him a reward.

Similarly, it can also deepen the relationship with Xia Yu, and add a layer of partnership to the relationship between allies, wouldn't that be better?

Furthermore, inviting Xia Yu in has another huge benefit, which is that it can stabilize the hearts of the company's employees and shareholders, and serve as a guiding force.

As for whether it will threaten the Dong family's rule over the company, he doesn't think about it anymore. After all, if Xia Yu doesn't lend a hand, it's hard to say if Orient Overseas Container Line can even be saved.

'That's fine, you help me ask about this. I'll take as many as are willing to transfer,' Xia Yu said with a smile, accepting Dong Chenghui's goodwill.

'Okay, I'll go back and deal with it first thing,' Dong Chenghui said hurriedly

'Well, there will be a definite result from the bank by the day after tomorrow at the latest, so you don't need to worry,' Xia Yu reassured Dong Chenghui once again

"Thank you, Chairman!'

With the mountain of worry off his shoulders, Dong Chenghui let out a sigh of relief.

After a few more cups of tea and a chat with Xia Yu, he proposed his leave.

...

After returning home, Dong Chenghui immediately called a meeting of senior management, set a strategy for cleaning up the fleet, and applied to the stock exchange for delisting.

That evening, many shareholders learned the news and knew that Orient Overseas Container Line had truly reached a critical moment.

Dong Chenghui did not deliberately exaggerate the situation, but simply gave others a choice: if they wanted to withdraw, he would take over all the shares and gamble that the company could rise again.

The following morning, the news of OOCL's impending fleet liquidation spread throughout the entire stock exchange.

After the stock market opened, OOCL's stock price plummeted.

Half an hour later, OOCL applied to the stock exchange to be delisted, and also issued an announcement stating that the company was willing to buy back the shares of its shareholders, and announced the buyback price, which was just a bit lower.

The Hong Kong Stock Exchange approved it immediately.

The entire capital market was shaken, and the stock prices of other companies also in the maelstrom, such as Kwong Wah Shipping and Wanbang Shipping, plummeted further.

On the third day, Jiuding Bank and HSBC each provided OOCL with a standby credit of 500 million US dollars.

It was not until September 5 that OOCL's 740 million US dollars in debt was transferred from island banks to Jiuding Bank and HSBC.

At the same time, Xia Yu's Jiuding Industrial Group acquired 38.8% of OOCL's equity for just 1.07 billion Hong Kong dollars.

Not only that, but the Southeast Asian Development Bank, the financial core of the Southeast Asian consortium, invested 100 million US dollars in Orient Overseas Container Line and obtained a 22.1% stake.

Furthermore, a meeting was held within the Southeast Asian consortium, and the members decided to transfer the shipping business to Orient Overseas Container Line as much as possible to support it through the difficult times.

Orient Overseas Container Line also began the process of cleaning up its fleet and returning capital.