Chapter 237 Off-balance sheet assets

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After Rebecca Mark was silent for a moment, she said in a low tone: "These are just Mr. Guo's personal guesses after all...!"

"It's not speculation, it's an estimate, it's an estimate based on facts!" Guo Shouyun interrupted, "Ms. Mark, I have always admired your hard work and tenacity in your career, and it is almost rare for a woman to achieve your current position in the American energy industry. I don't believe that a shrewd and capable person like you would not see how dangerous Enron's current form is. ”

After a pause, Guo Shouyun smiled slightly, and said meaningfully: "Or you plan to replace it when the Enron predicament is made public and Jeffrey Jilin takes the blame and resigns!"

Rebecca Mark's body trembled, and her pupils instantly contracted. Seeing her like this, Guo Shouyun knew that he had guessed correctly. In fact, the more capable and conceited a person is, the more proud he is inside. Rebecca Mark's talent and perseverance can be seen in the fact that she single-handedly built Enron International from a small department with only two or three big cats and kittens to an international energy giant with tens of billions of dollars in assets.

When she was unanimously praised by the American business community and was only one step away from the COO throne of Enron, she was ruthlessly abandoned by the company's board of directors, and was mercilessly assigned to the UK by her competitor Jeffrey Jilin, taking over the 'water business', which was almost impoverished.

After being ousted from Enron's center of power in Houston, the near-humiliating one, the proud Rebecca Mark is constantly thinking about revenge, trying to prove to the world that the Enron board of directors had made a serious mistake by refusing to make her Enron's COO.

And the best way to prove it is to replace Jeffrey Jilin and turn the tide to save Enron.

If everything is as Rebecca Marc thinks, then she will become a business legend and be respected forever like Jack Welch who saved General Electric and saved Intel from Andy Grove who was hanging upside down! This is also Rebecca Mark's highest requirement for herself, and even her ideal.

"Ms. Mark, I think you should understand one thing: getting a group of people in power to admit their mistakes is sometimes even harder than getting them to give up their wealth! I'm 90 percent sure that even if Jeffrey Jilin is kicked out of Enron in the end, then Enron's board of directors will never bring you back to that position! They will definitely hire another professional manager from outside to carry out a comprehensive reform of the company. Unfortunately, as the CEO of Azuricos Water, you have never been able to change the company's business difficulties, and you will follow in the footsteps of Jeffrey Jilin. ”

"I'm confident enough to turn around Azuricos' predicament, but Enron's management, led by Jeffrey Jilin, only knows how to securitize the company's assets and then continue to raise funds to drive up Enron's stock price, but they don't invest a penny in the company's operation. Otherwise, how could Azuricos get to the point where he is now on the verge of bankruptcy!" Rebecca Mark said angrily.

"Enron's fate was already predestined when it transformed from a physical company into an energy trading company similar to an investment bank, and adopted the 'fair value calculation method'! Fair value allowed Enron to always focus only on book assets, using financial speculation and the stock market to obtain income, but never to work hard to run the industry, so as to obtain continuous profits. So, when an industrial company is running like an investment bank, what is the good end?"

Looking at Guo Shouyun, who was convincing, Rebecca Marxso said after a while: "So do you think Enron can no longer be saved?"

"You know this question better than me, it's just that you don't want to believe it because of your expectations for Enron!" Will Harington, who was next to him, hurriedly took out a document from his briefcase and put it in Guo Shouyun's hand.

After taking it and looking at it twice, it was indeed what he wanted, Guo Shouyun turned his hand and put it in front of Rebecca Mark.

"This is some of the data we collected on Enron's losses, and because of the limited time and the fact that we didn't have access to Enron's core financial secrets, we only counted about two-thirds of her 3,000 financial entities. The total amount of debt exposed by these two-thirds alone has reached $25 billion. Compared with Enron's registered assets of $72 billion, the total debt ratio has reached 34.7%. I believe that this figure is by no means the whole of Enron's liabilities, and the larger off-balance sheet liabilities are even more staggering. ”

When it comes to off-balance sheet assets, here is a brief introduction to how off-balance sheet assets are formed. In Enron's case, she had just built a power plant, which for various reasons did not bring the expected profits, but instead suffered significant losses. So, how do you transfer this loss so that it doesn't appear on the balance sheet, thus affecting the company's share price?

The common practice is to set up a financial entity that is separate from Enron. On behalf of Enron, the financial entity negotiated with financial institutions, such as Goldman Sachs, Morgan, Citigroup, etc., to borrow high-interest loans from these financial institutions, and then used the loans to buy Enron's loss-making power plants at a price above market value. As a result, Enron recorded a profit on its books, and the loss-making power plant was successfully transferred to the financial entity.

Enron, which is profitable on the books, naturally has a very clean balance sheet, and is favored by uninformed investment institutions and investors, and the stock price has further increased. After the stock price increased, Enron began to recoup funds such as stock splits and issuing corporate bonds. The funds withdrawn from the capital market are then used to buy shares in that loss-making financial entity. This financial entity then returns the money to the financial institution.

In this circle, the loss-making power plant is still losing money, and it still belongs to Enron, but Enron and the financial institutions have made a lot of money, and only other investment institutions and investors who are unaware have incurred intangible losses. During the U.S. bull market in the 90s, this was Enron's most common method. But when the bull market turns bearish and investors become cautious, Enron's method of covering his ears and stealing the bell will no longer be able to play.

"Ms. Mark, I think you know better than I what Enron's so-called $72 billion assets are. Except for a few such as the Northern Gas Pipeline and the Teesside project in the UK, how many of Enron's projects are capable of generating normal profits? I can name a lot of loss-making projects, including the Dabor project in India, which you are proud of!"

Rebecca Mark's face instantly gloomy, India's Dabor Power Plant, which planned to invest 3 billion US dollars, and actually invested 900 million US dollars to complete the first phase of the 2015 megawatt power plant, is still standing in the ruins of modern steel on the Dabor Hills in Maharashtra, and has not generated a dime of revenue for Enron. This was the biggest scandal of her leadership of Enron International, and the biggest stumbling block for her to enter Enron's top leadership.

Guo Shouyun, who had no intention of ridiculing Rebecca Mark, changed his words after seeing that the effect was achieved, "I know that Enron's mistakes lie in Enron's 'fair value calculation method', the risk management system full of loopholes, and the market-oriented mentality of quick success." But because of these, Enron's truly valuable assets are already less than $30 billion. In an already deeply insolvent situation, unless fundamental changes are made and tens of billions of dollars are injected, no one can save Enron!"

Looking at the information in his hand and listening to Guo Shouyun's reasoned rebuttal, Rebecca Mark became silent for a while. After a long time, she said slowly: "Then what are you looking for me for? Is it just to make me give up the idea of taking charge of Enron?"

"I want to get the evidence of Enron's financial fraud in Ms. Mark's hands!" Guo Shouyun said word by word.

"What do I get?"

Rebecca Mark said calmly.

"$30 million in cash. Or a chance!"

"Opportunity?"

In the next three years, Pan Pacific will build 4~7 power plants with a total installed capacity of more than 6,000 megawatts in the western states of the United States. I can give you one of the project management rights, and if you do well, you will be promoted and become the senior vice president of Pan Pacific Energy Group, responsible for developing the Chinese market. ”

noticed that Rebecca Mark frowned slightly, but Guo Shouyun didn't give her a chance to speak, "... I know what you think, but I'm not Kenneth Lee and Jeffrey Gilling, fooling you with a shell department. The Chinese market is the market that I attach the most importance to, and it is on a par with the United States. In the next five to ten years, the company will invest 5 billion US dollars, or even more, to develop the power market in China!"

Staring closely at the eyes of the man opposite, Rebecca Mark, who didn't see the slightest dodge or hesitation in it after a while, said with suspicion in her tone: "Let's not talk about Huaxia Investment, do you know how much money to invest in the 6,000 megawatt power generation project alone?"

"Of course, at current prices, it would cost about $9 billion to build a 6,000-megawatt power plant!"

"Pan Pacific Energy Group, which is now burdened with losses of more than $600 million a month, and with mergers and acquisitions in the same industry, the losses continue to expand, can it come up with such a huge amount of money?"

Guo Shouyun smiled faintly, "That's why I came to Ms. Mark, only the evidence in your hand can make Jeffrey Jilin give up the manipulation of the California energy market! The savings are more than enough to expand the group's business and make up for losses. ”

Looking at the man who was always very confident in front of him, Rebecca Mark's face, which had been rigid, showed a slightly stiff smile, "It is rumored that the Thunder Fund personally managed by Mr. Guo has made a lot of money with the Argentine debt crisis, can I know the specific amount of this money?"

"I'm sorry, but this is a company secret!"

"Expected answer!" After nodding, Rebecca Mark suddenly said, "It's an honor to be able to chat with Mr. Guo, it's not too early, I'll leave first!"

Guo Shouyun frowned, the other party's sudden farewell was beyond his expectations. However, he did not want to fall into the negotiations.

After simply shaking hands with the other party, he stared at the shrewd and capable woman in front of him, and said slowly: "The funds in my hand are enough to reverse Enron's current predicament." So, Ms. Mark, after she goes back, it would be better to seriously consider my proposal just now!"

Rebecca Mark, whose face had not changed, nodded, obviously Guo Shouyun's last words had a great impact on her. However, she didn't ask anything more, and after saying 'goodbye', she left the café under Guo Shouyun's farewell.

"Boss, do you think she'll accede to our request?" asked Will Harrington, looking at the distant silhouette of the car.

"I don't know. But this is a smart woman. I'm sure she'll make the right choice!" After a pause, Guo Shouyun patted Will Harrington's arm, "Let's go, I'll treat you to lunch!"

"I know there's a nice Chinese restaurant around here!"

"Then you drive!"

"Okay!"

The two chatted and left.