Chapter 1378: Preparing for a large-scale takeover

Leonard, it actually seems complicated to decide which companies to abandon and which to keep. After all, the Mellon Consortium owns so many companies and shares.

But in reality, it's also very simple. Divide the assets into several levels, and you'll know what to do.

Xia Yu finished with a faint smile, and Leonard and Woodrow looked at him with sparkling eyes.

'Is it divided into core assets, backbone assets and investment assets?'

The younger Woodrow couldn't help but ask.

Xia Yu shook his head and said, 'It's not just this conventional division method. In this special period, stability is required, and the future few years must also be considered.'

'Therefore, it must also be divided into healthy assets, risky assets and severely non-performing assets.'

'Of course, there is also the prerequisite that the assets of value and financial investment be taken out separately and not counted in these three levels.'

This is more meaningful, and Xia Yu is not in a hurry, so he just waits quietly for Leonard and Woodrow to sort out their thoughts.

After a long time.

The older Leonard gradually figured it out.

Frowning, he asked Xia Yu, 'Do you mean that if a core asset is a distressed asset or a risky asset, it should also be abandoned?'

Xia Yu gave Leonard an appreciative look with a smile at the corner of his mouth: 'Yes, that's exactly what I mean.'

After getting a positive answer, Leonard's brow furrowed even deeper.

Xia Yu knew why he was struggling, so he gently prompted, 'Leonard, you have to understand that times are changing, and every industry has a cycle. It's impossible for any industry to be a sunrise industry forever. If you don't seek change, you will only be dragged down, posing a risk to the entire consortium.'

'Of course, some industries are not sunset industries, but the kind of company under the Mellon Consortium is doing very poorly. If there is no good benefit in the short term, it is not a pity to give up, and it is more important to return funds for self-protection.'

'Now for you, you don't have so much time to wait until those risky assets or non-performing assets regain their health!'

Hearing Xia Yu's words, Leonard and Woodrow's minds came up with one company after another.

These companies all fit Xia Yu's opinion.

For example, Gulf Oil Corporation, the Pennsylvania Shipyard in Chester, the Philadelphia Naval Shipyard in Philadelphia, Amoco Steel, National Steel, Wheeling-Pittsburgh Steel, Allegheny Ludlum Industries, etc., these core companies are all in the ranks of risky or non-performing assets, but they are all core companies of the consortium.

Gulf Oil's original net profit margin was extremely low, only a few percent, and now the international crude oil price has plummeted in the second half of the year, which will have a series of adverse effects on Gulf Oil. It is basically certain that it will lose money this year and next year.

Pennsylvania Shipyard and the Philadelphia Naval Shipyard in the United States, although they rank tenth and fifteenth in the field of shipbuilding in the United States respectively, and are involved in both military and civilian industries, have been losing money in the civilian shipbuilding sector, and orders for military ships are not so easy to come by.

Once the Mellon Consortium weakens, it will be difficult for these two shipyards to grab orders from the Navy. The huge payrolls will quickly push these two shipyards into the red and even bankruptcy. Therefore, these two shipyards have to be classified as risky assets between bad assets.

The situation is even worse for the four major steel companies. Although they are the core companies of the consortium, the US manufacturing industry is in a slump, and the country's steel industry is overcapacity. They have been hovering on the brink of losses for the past few years.

...

'If we really want to move these core companies, the family will have strong opinions,'

Leonard said with a bitter face.

Xia Yu smiled and said, 'It depends on how you persuade the family members, and it also tests their ability to distinguish right from wrong.'

Leonard and Woodrow glanced at each other and said helplessly, 'There's no other way.'

'There's just one more crucial problem.'

'If we really want to do this, the risky assets, non-performing assets, and assets with value and financial investments add up to a very large amount, and it will be difficult to find a buyer in a short period of time.'

'And in this special period, even if there are buyers, they will desperately try to drive down the price, and we will suffer huge losses.'

Xia Yu also did not hide it and said directly, 'If you really list all these assets, you can show them to me first. I can buy some of them depending on the situation, or I can find other friends to buy them together to help the Mellon family.'

'I can guarantee that the price will not be deliberately driven down, and it will be based on the actual price.'

As Xia Yu finished speaking, Cindy, who had been quiet until then, spoke up and said to her brothers Leonard and Woodrow, 'If the family gives up these assets and handles it this way, it should be the best choice for the family. After all, we are all family.'

Cindy's argument was the same as what her father Richard King Mellon had written in his letter, and of course Leonard and Woodrow supported it. It was better to keep the assets within the family than to let an enemy buy them.

If the assets were in the hands of Xia Yu or his friends, it would be very difficult for the companies of the Mellon Group to cooperate in the future.

'We definitely have no objections. I will raise it if the family discusses it at that time,' Leonard nodded emphatically and then asked another question.

'By the way, Xia Yu, I have another question. If these assets are liquidated, how can we make the most of the funds?'

'For example, how can we best use the funds of our family and the funds at the consortium level?'

This question touches on the core disposal strategy of this crisis.

After thinking for a long time, Xia Yu said to the two men, 'In fact, if there is enough time, a cross-shareholding structure like the six major island consortia would be appropriate, but now the enemy won't give us that much time.'

'So I suggest making full use of the financial platform.'

'The Mellon family should withdraw its own funds and increase its holdings in the four companies Mellon Financial Corporation, Bank of New York, National Bank of Pittsburgh and General Reinsurance Company, even if it means buying at a premium, or injecting capital into the company through private placement.'

'As long as these four financial platforms are firmly under control, the amount of capital that can be mobilised will be very large.'

'The assets held by these four financial platforms can be dealt with according to the previously mentioned strategy, and after withdrawing funds, the holdings in those companies that want to be retained can be increased.'

'As long as these four financial companies don't run into problems, then this crisis can be weathered smoothly, and there will be time later to slowly restructure.'

'Of course, from then on, the say of the Mellon family and the entire consortium will also gather in the hands of the heads of these four financial companies.'

Leonard and Woodrow subconsciously glanced at each other, and a series of thoughts popped into their minds.

'Xia Yu, thank you!'

'I know what to do, so please wait for our news then.'

Leonard solemnly thanked Xia Yu.

'You're welcome, we're family,' Xia Yu waved his hand away and smiled faintly.

Afterwards, Leonard and Woodrow hurriedly left.

'Honey, thank you,' Cindy leaned into Xia Yu's embrace and said gratefully.

'Cindy, this is what I should do, don't worry, this crisis will be overcome, you have to be more positive, okay?'

'For you, and for our child,' Xia Yu said tenderly.

'Mm-hm, I will.' Cindy obediently nodded her head lightly.

...

After taking a short stroll in the garden with Cindy, the two went to the hospital to visit old Mellon.

Later, Xia Yu took the opportunity to issue an order to Fok Kin-ning, who had remained in Hong Kong, through a secret channel.

He ordered various regional consortia and companies to mobilise funds, and in particular Polaris Capital to do its utmost and stand ready to attack the Cleveland Consortium at any time.