Chapter 462 Debt and Listing
"The current debt of DS Group is mainly denominated in pounds, accumulating more than 11.05 billion pounds; there are also loans of 3 billion US dollars, which are all principal, and our interest is being repaid on time..."
Soon, Brandon McCain, the chief financial officer of DS Group, gave the detailed liabilities of DS Group, which comes from various acquisition financing and loans they have made before.
Including--
When acquiring Standard Chartered Bank, it used its shares as collateral to obtain a US$3 billion loan from Goldman Sachs Group with an annual interest rate of 5%.
Mortgage 55% of O2 Telecom's shares and obtain a £4 billion loan from Northern Rock Bank for five years with an annual interest of 3%.
After Summit Media went public, it pledged its shares in Summit Media and borrowed 1.55 billion pounds from Standard Chartered Bank.
When acquiring the Gucci Group, it pledged its Argos retail group shares, Woaw technology shares, Argent real estate group shares, and 20 million Google shares to Northen Rock Bank for a loan of 2.5 billion pounds.
When it was still acquiring the Gucci Group, it used the shares of the Gucci Group as collateral to obtain a 3 billion pound financing loan from Standard Chartered Bank with an annual interest rate of 6%.
These are the debts borne by the DS Group itself, and other debts with some companies as the main body are excluded.
It can be seen from these that the DS Group still has a lot of debt. The current exchange rate of the pound against the US dollar is around 1.75. Therefore, the US$18.5 billion that DS Investment Company obtained last year has some surplus now. into pounds sterling, it will simply be able to repay these debts of DS Group.
In September last year, the highest exchange rate of the pound against the US dollar was around 1.85, and the lowest exchange rate during this period was only around 1.70...
Because it is still unclear what the attitudes of forces including the Rothschild family and the American Navigation Group towards him, Barron's strategy is to still make the DS Group bear relatively large debts on the surface, while his funds are We are shorting the GBP/USD exchange rate with extremely low leverage - less than three times leverage.
Now, the previous 18.5 billion US dollars of funds have become about 22 billion US dollars, which is equivalent to about 12.57 billion pounds in pounds. Indeed, it is almost all the debt they have assumed, and there is still a slight deficiency...
However, these debts do not have to be repaid in full. Just like the 4 billion pounds borrowed from Northrock Bank with 55% of O2 Telecom shares as collateral, the annual interest rate is extremely low, only 3%, and the term is a full 5 years. Year - You must know that in recent years, the exchange rate of the pound against the US dollar has remained above 1.7, but since 2009, the exchange rate has often dropped below 1.4. With such a low exchange rate, it is difficult to keep the US dollar. In the case of assets, it is still very profitable to return the pounds when the time comes.
What's more, in the subprime mortgage crisis, Northen Rock Bank may even go bankrupt. At that time, this part of their debt... will be extremely beneficial in certain negotiations.
The other is those loans from Standard Chartered Bank. Although the annual interest rate is often higher than 5%, compared with the income provided to customers by Caesars Fund and Global Industrial Investment Fund, it is considered cheap financing...
Moreover, Standard Chartered Bank itself is controlled by the DS Group. These loans do not affect long-term holdings at all - the exchange rate of the pound against the US dollar has even reached an exchange rate of 1.03 after 2022 in the original time and space. Compared with now, in US dollars In terms of pricing, we can save a large amount of pound debt repayment...
Therefore, Barron decided to first return the US$3 billion in financing provided by DS Group to Goldman Sachs Group when it acquired Standard Chartered Bank.
After the money is returned, the shares they hold in Standard Chartered Bank will be very safe, and they can also ensure that other loans from Standard Chartered Bank can continue.
Otherwise, if someone starts with Standard Chartered Bank and after he invests the funds elsewhere, if the other party takes control of Standard Chartered Bank and requires the return of those loans, although it cannot be regarded as a thorn in the side, it will be troublesome and will also face some related investigations. .
Then it is to return the 2.5 billion pounds that DS Group obtained when it acquired the Gucci Group by mortgaging its Argos retail group shares, Woaw technology shares, Argent real estate group shares, and 20 million Google shares to Northrock Bank. loan.
The main reason is that the assets mortgaged by this loan at the time, including Argos Retail Group and Woaw Technology, were not worth too much at the time, but now they are preparing for IPO. Even the 20 million Google shares are already worth nearly 8.1 billion US dollars - Google's current market value has exceeded 112 billion US dollars.
Therefore, the return of this part of the loan will allow these pledged shares to be used, thereby increasing the DS Group's mortgage assets.
As for the rest of the debt, you can keep it temporarily and invest the remaining funds in other areas.
After these loans are repaid, more than $14.6 billion remains.
Next, after O2 Telecom submitted its application for IPO listing, they also prepared to sort out O2 Telecom's financial situation.
In the earliest days, when DS Capital wholly owned O2 Telecom, they issued 1 billion pounds of corporate bonds to repay the 5 billion pounds of high interest they received from Barclays Bank and Goldman Sachs Group when they acquired O2 Telecom. part of the financing.
This part of the corporate bonds has been settled by O2 Telecom so far.
In addition, before this, the Saudi Public Investment Fund also purchased 1 billion pounds of O2 Telecom convertible bonds. These bonds will be convertible into O2 Telecom shares at the issue price when O2 Telecom conducts its IPO.
Similarly, when O2 Telecom acquired 51% of Czech Telecom's shares held by the government, the US$3.5 billion provided by Caesars Fund was also used as a convertible bond, which will be transferred to O2 Telecom during its IPO. for company stock.
Finally, when O2 Telecom was still acquiring the remaining shares of Czech Telecom, it borrowed a loan of 2 billion pounds from the Royal Bank of Scotland - this part was O2 Telecom's debt, which was insignificant compared with its assets at this time.
In the past year, O2 Telecom has had more than 40 million users, annual revenue exceeded 30 billion euros, and gross profit exceeded 3.5 billion euros. This is still developing new markets, and O2 Telecom has invested a lot of infrastructure funds. in the case of!
At this time, DS Group holds 100% of the shares of O2 Telecom, setting the total share capital at 5 billion shares. The IPO price is 5 pounds per share, and the market value is 25 billion pounds, which is the same as O2 Telecom’s size and profitability at this time. Capabilities are comparable to expectations - this is not an arbitrary decision. For example, France Telecom has more than 60 million users around the world (some are users in French countries, and the quality is not as good as O2 Telecom's European users), with annual revenue of 450 It is about 100 million euros, with a gross profit of about 50 million euros, and its market value is nearly 60 billion US dollars, equivalent to about 34 billion pounds!
According to the current development of O2 Telecom, in 2006, because its investment in infrastructure will be less than before, while its users will increase and profits will grow, these values will begin to approach the level of France Telecom. Therefore, the 25 billion pound The market value is already considered very "restrained".
Therefore, according to the previous agreement, the Saudi Public Investment Fund's 1 billion pound convertible bond will be converted into 200 million ordinary shares of O2 Telecom at a price of 5 pounds per share.
The US$3.5 billion convertible bonds held by Caesars Fund will also be converted into 400 million ordinary shares of O2 Telecom at a price of 5 pounds per share.
Plus O2 Telecom's upcoming public sale of 1 billion shares, including 500 million new shares...
After the IPO, O2 Telecom's total share capital will be 6.1 billion shares, of which DS Group still holds 4.5 billion shares, accounting for approximately 73.77%; Saudi Arabian Public Investment Fund holds 200 million shares, accounting for 3.28%; Caesars Fund holds There are 400 million shares, accounting for 6.56%...
Of the 1 billion public shares issued by O2 Telecom this time, 500 million shares were sold by DS Group and 500 million new shares were sold.
If the IPO is successful, DS Group will sell these 500 million shares of O2 Telecom and obtain 2.5 billion pounds of funds; in addition, O2 Telecom will also raise 2.5 billion pounds of funds through the issuance of new shares.
