Climbing the Career Ladder - Chapter 3 - Mutual Benefit
mously find it constructive, but unfair to us. We are severely undervalued!” Liu Fangsi was taken aback as soon as he saw the proposal, describing it as “sheer banditry,” thus he was the first to object. As the afternoon negotiation began, he voiced his concerns directly; the other two clearly shared his apprehensions.
“Mr. Liu, are we dissatisfied with the investment plan, or the valuation of the total assets of the company after restructuring, or perhaps the distribution of shares post-restructuring?” Sima Xiaoyu took over from Liu Fangsi, while Li Mengze sat down and began to taste the tea.
“Our side believes that our strength has been underestimated, and the proposal we put forward is not feasible,” Liu Fangsi disliked Sima Xiaoyu’s aggressive approach.
“Our side has stated that the proposal was made based on our actual situation; all proposals are intended for mutual profit and guided by the principle of long-term cooperation. The crux here is our situation. Our reality is a stock market crash, lost credibility, virtually no cash on the books, a company on the brink of bankruptcy, and no partners, with an uncertain future! While our side has ample funds and no pressure whatsoever.” As soon as Sima Xiaoyu finished speaking, the meeting room fell silent. The “Troika” of Wansheng looked at each other; they were obviously prepared mentally, but unwilling to openly acknowledge this reality, still hoping to fight back and make a final struggle.
“As far as we know, our side is not an ideal partner either. Indeed, we face many difficulties, but the help we can offer is limited, and mutual benefit cooperation won’t be that easy!” Wansheng evidently had its own concerns, recognizing the issues with Li Mengze’s capabilities. So far, Li Mengze had been elusive about his background, forcing them to proceed cautiously.
“Our side may not be the best partner, but this cooperation can be mutually beneficial:
First, we have a substantial amount of cash at our disposal;
Second, we are not competitors;
Third, we don’t have a poor stock market record-in fact, we represent speculative capital;
Fourth, although we lack technical and personnel strength, our company operates very successfully and does not need to bring in a strong partner. This is the fundamental reason we are willing to invest;
Fifth, we will not and do not wish to interfere with the company’s operations post-collaboration. Our goal is to find a way out for our capital and achieve an appreciation of the investment.”
As Sima Xiaoyu spoke, she glanced at Li Mengze and then fixed her gaze on Chen Xiaochong. She was a bit worried because Li Mengze had anticipated this situation at noon and told her she could speak her mind without reservations.
Sima Xiaoyu was concerned; once the words were out, she knew they would no longer be able to dominate the proceedings entirely, but she also knew they had no choice!
Chen Xiaochong fell into contemplation. Sima Xiaoyu had played her hand, revealing their position, and now it was up to him to respond, whether to catch the ball or not, and how to handle it if he did.
Chen Xiaochong pondered and weighed his options. This was a significant decision in his life, but he was uncertain. He looked over at Ye Mingwen.
Ye Mingwen knew it was time for him to step in, as some matters still required his intervention, and he was the one who could ultimately make the decisions.
“Mr. Li, are these truly speculative funds?”
“They are domestic speculative funds looking to regularize. The speculative fund hopes to have a mutually beneficial cooperation with your company,” Li Mengze knew it was his turn to intervene as the negotiation reached a critical moment. “This is advantageous for both parties. Although risky, high risks come with high rewards, don’t you agree, Elder Ye?”
“Please, give us a moment. We need to discuss this and will get back to you as soon as possible,” Ye Mingwen concluded, and the Troika from Wansheng left the meeting room.
The meeting room suddenly fell quiet, the vast space echoing with silence as neither person spoke.
“Xiaoyu, don’t be nervous, just relax,” he sighed, “like this, lying down might be more comfortable. Relax, I’m here… there, don’t move…”
“It’s uncomfortable lying like this; it’s too awkward, and it wouldn’t look good if someone saw us.”
“Then, how about I lie in your arms?”
“Go on, I dare you!”
“Maybe I could give you a massage, that should be okay.”
“Mm.”
Half an hour later, when Chen Xiaochong and others entered the meeting room, they saw Li Mengze giving Sima Xiaoyu a massage.
Sima Xiaoyu appeared utterly content, leaning on Li Mengze and resting with her eyes closed. This scene made the three onlookers envious, instantly relaxing their tense nerves and prompting a shared chuckle.
“Mr. Li, you are well aware of our predicament,” Chen Xiaochong began, his tone becoming more decisive, although his face still bore a trace of bitterness and reluctance. “Thus, even though we are dealing with speculative capital, we are willing to cooperate with you. We prefer the second proposal, but some details need to be negotiated.”
“sir Ye, Mr. Chen, Mr. Liu, thank you for your sincerity,” Li Mengze replied, barely concealing his delight. “You are aware of our capabilities. Before we proceed with negotiations, please be frank about your actual situation; this transparency will facilitate a genuinely collaborative effort. As for the negotiation details, Miss Sima can handle them. I’m more interested in discussing your tea,” he joked at the end.
“Miss Sima, our estimates are precise,” Chen Xiaochong continued. “Our current market fundraising amounts to 55 billion yuan with 15 billion shares in circulation, at a current share price of 2.70 yuan and a guaranteed price of 4.0 yuan. The Securities Regulatory Commission has set the floor price at 3.70 yuan. Now, with our funding included, we can mobilize 60 billion yuan.”
The negotiation was tense and intense, with Wansheng Company and Li Mengze carefully weighing their respective interests, fighting over every inch of ground.
During this period, the negotiation was interrupted three times, and Wansheng’s “Troika” repeatedly consulted to balance interests and protect existing rights.
At 19:25, Wansheng Company and Li Mengze finally reached a consensus, with the following agreement terms:
The speculative party (Party B) invested 5 billion yuan, of which 4.5 billion yuan was used for the repurchase of circulating stocks in the stock market, and 500 million yuan was injected into the company to enhance its strength;
Wansheng Company committed 54.5 billion yuan, of which 53 billion yuan was for the stock market repurchase of circulating stocks, and 1.5 billion yuan was injected into the company to enhance its operational capabilities; the remaining 500 million yuan was proportionally distributed to the original shareholders under a certain pretext (this was not reported to the Securities Regulatory Commission).
All circulating shares of the company were repurchased under the supervision of the Securities Regulatory Commission (the Commission allowed and required this), with a share price of 3.833 yuan for circulating shares, and non-circulating shares were compressed at a 5:1 ratio to 2 billion shares priced at 6.0 yuan, with a floor price of 5.0 yuan;
The company consisted of four major shareholders, with the original shareholder ratio unchanged, each reducing their share by 25%, resulting in the four major shareholders owning 96% of the company’s total shares. The transfer of non-circulating shares gave major shareholders the right of first refusal, with minor shareholders holding 4% of the shares; among them, Ye Mingwen held 38%, the speculative party (represented by Li Mengze) held 25%, Chen Xiaochong held 20%, and Liu Fangsi held 13%.
The company would not issue new shares until approved by the Securities Regulatory Commission and after a board of directors’ meeting.
It was also agreed that the existing leadership team would remain unchanged, with a suitable position added for the speculative party when appropriate.
From the agreement, it was evident that Wansheng Company had regained vitality and had enhanced its dynamism, with both parties jointly investing 2 billion yuan for the company’s operational activities, improving the company’s financial condition.
The original shareholders profited sweetly from the stock market, with 500 million yuan divided into private accounts, a mutual understanding between both parties.
Ye Mingwen suffered the greatest loss, his original 51% stake now reduced to less than forty percent, not enough to hold a majority in the company, losing his fundamental control over the company.
“Mr. Chen, please purchase two plane tickets for us. We need to back Beijing.”
Li Mengze couldn’t relax yet; he knew that reaching an agreement did not mean it was effective. It required signatures and seals to be binding. His urgency was not a problem at this moment, as the other party was also in a rush. According to the agreement, Wansheng needed to submit the company restructuring plan to the Securities Regulatory Commission without delay;
And tomorrow is Friday. The prerequisite for submission was the arrival of 5 billion yuan in funding, which of course meant they needed to hurry back to Beijing.
Li Mengze said he needed to reply to his leaders in person. Everyone was racing against time, and time was the key to success or failure.
The contract samples were quickly prepared, with both parties ready. Li Mengze had brought a draft, and Liu Fangsi had been preparing the contract since 3:30 PM, which explained his absence in the evening. Once the parties discussed, they all smiled at each other, nearly unanimous in their opinions.
At 9 PM, with the involvement of Wansheng’s lawyer Li Xiangzhi, the contract was signed and went into effect, complete with a video recording for posterity. The master of ceremonies even prepared a special dessert and a bottle of champagne for each person.
“Mr. Li, can we call you Mengze?” Ye Mingwen was in high spirits. He now had absolute confidence to get through this hurdle and no longer cared about losing control of the company. He felt very positive about Li Mengze and wanted to get closer.
“From now on, just call me Mengze!” Li Mengze didn’t like being called Mr. Li, and his mood was especially good now, so he was naturally agreeable. He had gotten off to a great start and was full of hope and pride…
“Mengze, this is the fastest I’ve ever signed a contract in my life. Just think, it took only three days to sign a contract, just three days! Time waits for no one!” Chen Xiaochong remarked sentimentally.
“Ha, no worries, I think the contract will be effective by tomorrow. We’ll still need your help preparing the submission to the Securities Regulatory Commission. Your task tomorrow is hefty, and we can’t be of much help. However, after success, let our boss treat everyone to a meal. Let’s have a feast at his expense, what do you say?
Sima Xiaoyu and I will rush back to Beijing. We might have to visit Guangzhou again soon. See you then,” Li Mengze reassured…
“Mengze, this is the fastest I’ve ever signed a contract in my life. Just think about it, it only took three days to sign a life-or-death contract, just three days! Time really waits for no one!” Chen Xiaochong said with a sense of emotion.
“Ha, don’t worry, I think the contract will take effect tomorrow. We’ll need your help to prepare the solution to report to the Securities Regulatory Commission. Handling those big shots will depend on you all. You have a big task tomorrow, and there’s not much we can do to help. we succeed, let’s have our boss treat everyone to a meal and really make him pay. How does that sound to everyone? For now, let’s hurry back to Beijing. We might have to come back to Guangzhou soon, and then we can hear your advice again.” While comforting them, Li Mengze was also trying to clear himself of any suspicion. He realized that his performance tonight had been a bit too obvious, even though they had made a couple of seemingly genuine calls to Beijing and sent a few emails to put on a show.