At this time, not far from the office building where Tianyu Fund is located, on the top floor of a 45-storey building, negotiations on the acquisition of Peregrine's equity are in full swing.

In a large, bright conference room on the top floor, dozens of professionals in suits and leather shoes sat in two camps, frequently exchanging heads and ears, and occasionally someone came in from outside, delivering certain documents.

As the multi-billion Hong Kong dollar involved in this transaction, both parties hired the best financial teams. Needless to say, Peregrine's M&A department is first-class in the whole of Asia, and under the leadership of Nian Botao, they are elite, plus Du Kanghui, who is responsible for dealing with European and American consortia, and their legal department, it can be said that Peregrine is pouring out of the nest.

The ZCI of the Zurich Center Group also attaches great importance to this, in addition to sending their global vice president, Cleo. In addition to bringing the negotiation business of the negotiation group, Dante also hired Stanley Hong Kong as their financial advisor, as well as barristers from several top law firms in Hong Kong, and Anxinda Auditing, one of the world's top five audit firms, are also on the lookout.

The two sides have already gone through months of negotiations and have reached a preliminary agreement. The reason why it was so smooth before was that Peregrine was in urgent need of capital turnover, and secondly, ZCI had long been eyeing the increasingly developed Asian region and wanted to come in and get a piece of the pie, and Peregrine was one of the giants of the Asian capital market, so the two sides could be regarded as a hit.

In the preliminary agreement, ZCI agreed to buy a total of 24.1% of Peregrine's shares at a price of HK$8 per share. Converted into about 200 million dollars. In order to ensure that the leadership of the company does not fall into the hands of others, Peregrine not only set this part of the shares as convertible and redeemable, but also stipulate that they are preferred shares. The purpose of this is to ensure that ZCI can be repurchased and turned into debt when the cash is sufficient in the future, and at the same time, ZCI, an outsider, will not interfere in the company's decision-making.

Naturally, ZCI also set restrictions, and the transaction was subject to no significant changes in Peregrine's market position and operating conditions, otherwise the transaction would be automatically cancelled.

After reaching a tentative agreement, Peregrine continued to look for potential financiers in the market, and soon they reached a plan with First Chicago Group for a total of $25 million in preferred shares.

At this time, as long as these two transactions can be successfully approved, Peregrine will no longer have liquidity troubles. At the same time, it can also maintain the current high rate of growth.

It looks like a win-win situation. But the outcome of the negotiations was terminated just two days ago. The reason for this is the deterioration of the Indonesian market, which has seen the rupiah plummet against the US dollar.

Indonesia is known to be an extremely corrupt country, and doing business in such a country. Some unspoken rules are unavoidable. Even giants like Peregrine are not immune.

In order to be able to take over the debt issuance of Indonesia Taxi Company. Peregrine first loaned $270 million to the company through public relations, and then gave the company a $200 million bond bond. At the same time, he also helped the company to make a swap transaction of 200 million US dollars, so that he was able to receive the company's total bond issuance rights of 1 billion US dollars, and the sales model was underwriting.

If the rupiah had not been in crisis, Peregrine would have ended up with several cash charges of $1 billion in bond sales, loan interest and swap transaction costs, totaling tens of millions or even hundreds of millions of dollars.

It has to be said that this is a lucrative deal, and it is no wonder that Peregrine has invested so much money in this project. It's just that with the collapse of the rupiah, this deal has become a hot potato, first of all, whether the $270 million loan can be recovered has become a thorny problem, followed by the $200 million bond issuance margin, and these are still second, the most important thing is that the $1 billion bond has almost become waste paper.

The financing is in US dollars, but the repayment is in rupiah, although the coupon rate is as high as 7.5%, but at such a time, who investor is willing to buy it, and in the end the bond can only rot in Peregrine's own hands.

Although Peregrine has a large annual turnover, his own assets are not much, and in the published statements, the total assets in the latest quarter are 5.3 billion US dollars, which is the sum of many assets including cash, real estate, investment income, etc. And because of the Indonesian incident, Peregrine is running out of cash on its books at the moment.

"Mr. Dante, didn't we make an agreement before? Why did you suddenly change your hexagram? This is not in line with the principles of doing business. "The first to attack was Du Kanghui, a blue-eyed blonde white British, who on this occasion and the leader of the other party, Cleo. Dante communication is the most suitable, and it is also suitable for playing the emotional card.

"Principles?" Cleo. Dante snorted disdainfully, "Mr. Du, since we are talking about principles, then we have to mention the contract." In the contract, we agreed that we would not reverse the investment until there were no significant changes in Peregrine's operating conditions and the market. But now, we think that everything is different, and it is natural to renegotiate the conditions. ”

"It's a shame." Du Kanghui shook his head, glanced at Nian Botao beside him with a solemn face, and then showed his hole card, "7.5 Hong Kong dollars per share, the coupon rate is reduced to 7.3%, this is our bottom line, what do you think?" ”

"Nope! No! No! The look of disdain on Cleo's face increased a little, "This price is still too high." Mr. Du, Mr. Nian, why don't we first take a look at our final due diligence on Peregrine? ”

As he spoke, he flipped through the stack of documents in front of him and read it for a long time: "Because the $270 million invested in the Indonesian market cannot be recovered, and the $1 billion Indonesian bonds underwritten cannot be sold, Peregrine's net assets have shrunk seriously. In addition, Peregrine has investments worth a total of $600 million, which are largely unrealizable or recouped in the short term. Even if it were possible to turn into cash, the amount would have shrunk significantly due to the collapse of the rupiah, and the final amount could be less than $200 million. ”

Ignoring Du Kanghui and Nian Botao's increasingly ugly faces, Cleo closed the document with a "snap" and continued: "Counting these, Peregrine's net worth has fallen from $5.3 billion to $3.2 billion, not counting the shrinkage in the stock market. Now, if we don't bring in strategic investors, I'm afraid Peregrine is in danger of liquidation. Both, our sincerity at ZCI is very sufficient, and we are happy to help Peregrine get out of the current predicament. But we are businessmen after all. It is impossible to do things that are detrimental to our own interests, so we will try to get the best price possible. ”

"Tell me about your conditions!" Nian Botao looked haggard, waved his hand weakly, and stopped Du Kanghui from continuing to grind. Peregrine is the work of his life. Naturally, it cannot be closed down at this time. As long as you can get through this time. It is not necessary to make a comeback.

"HK$5.5 per share, while the coupon rate drops to 7.0%." Since the agreement requires the takeover of a portion of Peregrine's holdings of Asian corporate bonds, the coupon rate is also within the scope of negotiation. As the buying party, Cleo will naturally do everything possible to lower the coupon rate.

Although he was prepared in his heart, Nian Botao was still frightened by this number, and then a wave of anger surged in his heart, which made him almost lose his demeanor, "This is impossible!" When pigs fly! You must know that we are selling preferred shares, and the price of ordinary shares today is still 5 Hong Kong dollars, so it is impossible for you to want to buy at this price! He roared.

"I'm afraid your news is too late, Mr. Nian." Regarding Nian Botao's thunderous jump, Cleo still had a smiling look, "Today's closing price, Peregrine plummeted 14% to close at 4.7 Hong Kong dollars per share, which is the price of ordinary shares, and the price of preferred shares naturally falls." You know, we agreed to acquire preferred shares and give up the right to speak, which is also full of hope for Peregrine. Let's hope you don't let us down. ”

At this moment, Du Kanghui and Nian Botao both showed stunned expressions on their faces, they glanced at each other, and then at their teams, and saw that most of them nodded their heads, and then they realized that the market value of their company's shares in the capital market had shrunk again.

"HK$7 per share, 7.4% coupon rate." Du Kanghui gritted his teeth and ruthlessly quoted a new price, and his heart was dripping blood at this moment.

Who doesn't want Cleo on the other side to react at all, as if he didn't hear the latest price offered by Du Kanghui, and still looked at each other with a smile.

"HK$6.5, 7.35% coupon rate." The corners of Du Kanghui's mouth twitched slightly, and he pressed down on his own offer again. It's just that to his disappointment, the other party still didn't react.

"6 Hong Kong dollars, it can't be lower, 7.3% coupon rate, this is our bottom line." Seeing the other party's reaction, Du Kanghui had no choice, lowered his head and discussed quietly with Nian Botao for a long time, and then gritted his teeth and quoted a lower price.

This time, Cleo finally reacted, and after discussing with his team of financial advisors and lawyers for a while, he said: "5.5 Hong Kong dollars per share, 7.15% coupon rate, this is the highest price we can give." ”

Seeing that the other party finally said something, Du Kanghui and Nian Botao glanced at each other, and they both saw joy in each other's eyes. Although the other party said that it was the highest offer, this was not true, and there was no doubt that the price of their own side had approached the psychological price of the other party.

Naturally, they would not follow Cleo's quotation to make a deal, and after talking to each other for a long time, Bo Tao said: "Why don't we modify the content of the contract a little, as part of the transaction, we can transfer part of the Asian corporate bonds, of course, the price of this part of the bond is slightly lower than the market price." As part of the exchange, we would like you to increase the offer of preferred shares. ”

Seeing that there was a new situation, Cleo and his team urgently negotiated for half an hour, and when he walked into the conference room again, a sincere smile finally appeared on his face, "5.75 Hong Kong dollars per share, a total of 200 million US dollars of preferred shares, plus 175 million US dollars of bonds, with a coupon rate of 7.25%, I accept this condition, and I only accept this condition." ”

While they were deliberating, Peregrine was also engaged in heated discussions, and finally they came to the conclusion that if the other party accepted the conditions for taking over the bonds, then Peregrine did not need to sell too many preferred shares; If the other party does not accept it, then the amount of preferred shares is at least unchanged and, if possible, increased according to the magnitude of the price concession.

"The price is according to what you said, but in terms of the number of preferred shares, we can't sell too much, and $100 million is our bottom line." Nian Botao's attitude completely reversed and became aggressive.

Since the other party has the intention to invest in Peregrine, it is natural to take a fancy to Peregrine's vision. It is important to know that when distributing dividends, preferred shares have a higher level of dividend order than ordinary shares, and it is naturally impossible for the other party to get more shares when the price has been lowered, and there is no need to sell more preferred shares if the bond has already raised some funds.

After a verbal battle over how much of the final preferred stock to sell, the final agreement was reached for Peregrine to sell $175 million worth of Asian bonds to ZCI, which were highly creditworthy, in good payment condition, and had no risk of default. In return, ZCI paid a portion of the future proceeds of the bonds to Peregrine, and at the same time lowered the share requirement for preferred shares, requiring Peregrine to sell preferred shares worth about $100 million, accounting for 16.7% of the total preferred shares.

The next work will be handed over to the financial advisors and lawyers of both parties, who will draw up the contract in the fastest possible time, hand it over to the other team's team for review, and then sign it by the leaders of both parties, and then announce it to the market.

Since the transaction involved the purchase and sale of large shares, Peregrine ceased trading in its own shares after this day, commonly known as "trading suspension", at a price of HK$4.3 per ordinary share. No one would have thought that after this suspension, this stock would completely disappear from the section of the Hong Kong Stock Exchange.

Some people, I don't know when I look at the Tao is the last glance; There are some things, I don't know when I have done it, it is the last time; And some stocks, I don't know which suspension will never resume trading. What investors didn't expect was that Peregrine, the investment banking giant that controls two listed companies, became history after today's suspension.

After that will be indefinite. (To be continued......)

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