In Hong Kong, we build a global business empire

Chapter 1010 A single thought can lead to the loss of hundreds of millions in dividends for China Po

As soon as Lin Haoran finished speaking, in the conference room, Laurence Kadoorie and Michael Kadoorie, father and son, exchanged glances, their brows furrowed.

They originally thought that this trip to the mainland would, like in the past, ultimately fail to reach an agreement.

Although they brought Lin Haoran into the discussion, it was only his first time attending a meeting, and they believed it was impossible for him to make a decision on his first visit.

After all, this involves a $40 billion investment. Even if most of it is financed through loans, or even if they only contribute one-tenth of the funds, the amount of money they need to raise themselves is still a huge sum.

But now, the other party not only wants to push for the Daya Bay Nuclear Power Plant to be completed as soon as possible, but also wants Hengsheng Group to provide a portion of the loan.

Has Lin Haoran gone mad?

Is this because they think they have too much money?

With Hong Kong's future uncertain, how dare Lin Haoran take such a huge gamble?

Isn't he afraid that if the situation in Hong Kong deteriorates, these billions of dollars in investment will go down the drain?

At this moment, Laurence Kadoorie was filled with doubt.

This situation completely disrupted his thoughts.

He had assumed that since it was Lin Haoran's first time attending the meeting, he would attend several more meetings before making a statement after thinking things through.

Unexpectedly, the other party not only made the decision on the spot, but also offered to provide a loan from Hengsheng Group.

This is completely contrary to the common sense of business negotiations and the prudence that a shrewd businessman should have.

Although the Kadoorie family is also willing to push for the Daya Bay nuclear power plant to be completed as soon as possible, otherwise they would not have been so proactive in recent years.

The preliminary work for the Daya Bay Nuclear Power Plant, including site selection, geological exploration, environmental impact assessment, technical solution comparison, and financing scheme design, involved a great deal of effort and a significant investment of human and material resources.

It's not that they don't want to do it, but that they dare not gamble everything when the situation is unclear.

CLP Power is the core foundation of the Kadoorie family. If the investment goes wrong, it will not only affect CLP Power, but also the entire Kadoorie family's nearly 100-year-old business in Hong Kong.

He cannot afford this price.

"Mr. Roland, what do you think of Mr. Lin's statement?" Director Luo was in a very good mood at the moment. With Lin Haoran's encouragement, he knew that things would probably work out this time.

So he smiled and looked at Laurence Kadoorie again.

Regardless of the circumstances, the Daya Bay Nuclear Power Plant cannot avoid CLP Power. Currently, the mainland is experiencing a power shortage, but this may not be the case in the future. In the future, the electricity generated by the nuclear power plant will mainly be sold to Hong Kong, which presents an opportunity to obtain substantial foreign exchange.

The RMB has very poor international recognition; the US dollar is the true hard currency.

If the Daya Bay Nuclear Power Plant can sell some of its electricity to Hong Kong and exchange it for US dollars after its completion, it can not only repay the loans from France, but also accumulate valuable foreign exchange reserves for the mainland.

The mainland has calculated this very clearly.

Although Lam Ho-yin's Hong Kong Electric Group would certainly be willing to purchase electricity from the Daya Bay Nuclear Power Plant, the Group's power supply area is limited to Hong Kong Island, which is ultimately separated from the entire Kowloon Peninsula and the New Territories. Without CLP Power's power grid, the electricity from the Daya Bay Nuclear Power Plant simply cannot be transmitted to Hong Kong Island.

Therefore, it would be best to bring CLP Power into the project and make them shareholders, regardless of the size of their stake.

After a moment's thought, Lawrence Kadoorie said, "Director Law, distinguished leaders, Mr. Lin, Mr. Chen, I would like to discuss this matter with the board of directors of CLP Power. I can give you a reply as early as tomorrow."

The atmosphere in the meeting room immediately turned cold after those words were spoken.

Director Luo's smile froze on his face, his hand holding the teacup paused slightly, and then he casually put it down.

He glanced at Lin Haoran, then at Laurence Kadoorie, his lips moved as if he wanted to say something, but he swallowed it back in the end.

Lin Haoran remained calm, picked up his teacup, took a slow sip, and then put it down. He said unhurriedly, "Sir Kadoorie, you are the chairman of CLP Power. CLP Power is an enterprise of your Kadoorie family. The board meeting is just a formality."

If you nod your head here, who on the board would dare to object? You say you want to discuss it, but that's just because you want to wait and see.

But I can wait, but Guangdong Province can't, and foreign-invested enterprises in the Pearl River Delta can't.

If CLP Power has no interest in the Daya Bay Nuclear Power Plant project, wouldn't it be better for them to withdraw from the project altogether and have the Hong Kong Electric Group cooperate with the mainland government?

This way, your Kadoorie family won't have to take any risks, and we won't have to waste our time here.

Lin Haoran knew that the mainland wanted to use the Daya Bay Nuclear Power Plant to earn foreign exchange, but in Lin Haoran's view, it was just US dollars. He had plenty of US dollars in his hands and didn't need to rely on selling electricity to exchange for them.

With the foreign exchange reserves of Hengsheng Group's banks, plus the funds he mobilized on Wall Street, it wouldn't be a problem for him to come up with several billion dollars.

He could find ways to help the mainland if it lacked foreign exchange, but not through such an inefficient method.

Anyway, the mainland has countless resources, so he won't lose money by helping; on the contrary, he'll make a fortune.

The main problem to be solved now is the power shortage in the Pearl River Delta.

If this problem isn't resolved, it will inevitably affect his investments in the Pearl River Delta sooner or later.

Upon hearing this, Director Luo hesitated, then remained silent.

He felt both gratified and somewhat helpless about Lin Haoran's statement.

Reassuringly, Lin Haoran was willing to assume the most crucial credit endorsement and part of the loan for the Daya Bay project, which was far superior to the Kadoorie family's scheme of wanting benefits without taking on any risks.

Unfortunately, while Lin Haoran does have money, the mainland cannot rely on him for everything.

Laurence Kadoorie was naturally unwilling to give up on the project completely.

Chunghwa Telecom had been preparing for this project for several years, but due to the complex political factors and their unwillingness to take on too much risk, they had been delaying the signing.

But they were unwilling to give up.

The initial investment, the expenditure of human and material resources, and the relationship built up with the mainland government over many years are all sunk costs that can never be recovered once abandoned.

Moreover, although he couldn't see the future of Hong Kong clearly, what if it developed well? Wouldn't that mean that Hong Kong's economy would get better and better, and its electricity consumption would increase? At that time, with the electricity from the Daya Bay Nuclear Power Plant to complement it, it would also be a good thing for CLP Power.

At least, we no longer need to worry about Hong Kong's future power shortages.

Lawrence Kadoorie knew very well that Hong Kong, a small place with limited land resources, was finding it increasingly difficult to build new large-scale power plants.

CLP Power has been expanding its Castle Peak Power Station in Tuen Mun, New Territories. The Castle Peak A plant officially started supplying electricity two years ago, and the Castle Peak B plant is under construction. In recent years, Kowloon Peninsula has indeed not had to worry about power shortages!

But what happens next?

What about ten years from now? What about twenty years from now?

With land exhausted, environmental pressures mounting, and public protests increasing, what will happen to Hong Kong's power supply?

We can't build a power plant in the middle of Victoria Harbour, can we?

The Daya Bay Nuclear Power Plant is the best solution.

It is close to the mainland, low in cost, stable and reliable, does not require land in Hong Kong, does not have to deal with environmental organizations, and does not have to worry about public protests.

Electricity is delivered cleanly and efficiently via submarine cables.

Therefore, CLP Power cannot abandon this project.

It wasn't for Lin Haoran, nor for the mainland government, but for the Kadoorie family themselves.

Moreover, his son Michael also made a good point: the Daya Bay nuclear power plant project was the best opportunity to ease tensions with Lin Haoran.

The Peninsula Hotel is gone forever; there's no point in dwelling on it anymore.

Instead of dwelling on past grievances, it's better to find new common interests in cooperation.

Given Lin Haoran's current influence in Hong Kong, continuing to have such a tense relationship with the other party is not a good thing.

Unless the Kadoorie family, like Jardine Matheson, withdraws directly from Hong Kong, they will not be afraid of Lin Haoran.

However, CLP Power is the foundation of the Kadoorie family, and the Kadoorie Hill property is the family's lifeline. They cannot leave, nor can they leave.

Since we can't leave, we must face reality.

Lin Haoran was at the height of his power in Hong Kong, and even British-owned companies that were previously stronger than CLP Power, such as HSBC, Jardine Matheson, and Standard Chartered, were all handed over to him. What right did the Kadoorie family have to continue to fight against him?

Rather than passively taking a beating, it's better to take the initiative and find new room for survival through cooperation. Moreover, since Lin Haoran has chosen to enter the fray and wants to help the British GEC company secure this business, it's clearly impossible, so there's no need to dwell on this matter any longer.

When Laurence Gardeau thought of this, the tension in his heart finally eased.

He pondered for a moment, then said, "Mr. Lin, Director Luo, since Hong Kong Electric Group is willing to take the lead in accelerating the implementation of the project, I would also like to express my opinion on behalf of CLP Power that CLP Power will not withdraw from this project."

Originally, if the Sino-British negotiations had gone smoothly, CLP Power could have taken on a maximum of 25% of the shares. However, with Hong Kong's future uncertain, as the chairman of CLP Power, I dare not gamble with the company's future, so a 25% stake is impossible.

To mitigate the risks for CLP Power, we are only willing to acquire a maximum stake of 5%. Once the nuclear power plant is completed and operational, the power plant can be connected to CLP Power's grid, and even transmitted to HK Electric's grid. As for other conditions, we can discuss them further. Mr. Lin, what do you think of this proposal?

Laurence Kadoorie's words carried a hint of goodwill towards Lin Haoran.

Upon hearing this, Lin Haoran laughed and said, "Of course, even if CLP Power is only willing to take a 1% stake, our HK Electric Group will not object. I understand that Sir Laurence is unwilling to take too much risk, which is understandable. After all, everyone will weigh the risks of a multi-billion dollar project."

Hong Kong Electric Company and CLP Power are the two major power supply groups in Hong Kong. We keep to ourselves and have no conflict of interest. On the contrary, we should cooperate to achieve mutual benefit and jointly maintain the power stability of Hong Kong.

The Daya Bay project is a great starting point for cooperation, and I hope we can have more cooperation in other areas in the future.

These words both expressed their stance and gave the Kadoorie family a way out.

Since the other party wanted to ease tensions between the two sides, Lin Haoran was naturally happy to see it happen.

He did want to acquire CLP Power, but the government simply wouldn't give him the chance, not to mention the Governor's Office wouldn't allow it. It was impossible for a Chinese man like him to completely monopolize Hong Kong's power supply; he didn't even need to think about it.

Instead of dwelling on impossible things, it's better to maintain good relationships within the existing framework of cooperation.

The Kadoorie family's power grid is something he can't avoid; rather than confronting them head-on, it's better for everyone to have a peaceful resolution.

“Mr. Lin, I’m glad you think that way. Hong Kong Electric Group and CLP Power are not competitors, but partners. The Hong Kong power market is big enough to accommodate both of us.”

The previous offense was indeed the fault of the Kadoorie family, but we have already paid the price for our mistakes. The loss of the Peninsula Hotel is a heavy enough price for the Kadoorie family.

I believe Lin Sheng isn't the type to hold grudges; let bygones be bygones.

As Laurence Kadoorie spoke, his tone was sincere, and his gaze was open as he looked at Lin Haoran.

These words are both a summary of the past and an expectation for the future.

He humbled himself, took the initiative to seek peace, and adopted a very low profile.

Lin Haoran raised his teacup and smiled at Lawrence Kadoorie, saying, "Sir Kadoorie, let's not dwell on the past. The Daya Bay project is a major undertaking. Let's get this done first, and we can deal with the rest later."

Roland quickly picked up his teacup and gently clinked it against Lin Haoran's.

"Alright, let's not talk about it anymore, Mr. Lin, please go ahead!"

They each took a sip, put down their teacups, and smiled at each other.

The atmosphere in the meeting room completely relaxed.

Director Luo secretly breathed a sigh of relief upon seeing this scene.

He had initially worried that the feud between Lin Haoran and the Kadoorie family would affect the negotiations, but now it seems that both sides are smart and know what to let go of and what to hold on to.

"Okay, since both sides have expressed their opinions, let's continue the talks in this direction and try to reach an agreement on all the main terms today, and ideally sign the contract."

Director Luo cleared his throat, steer the conversation back on track, and continued, "Regarding the shareholding ratio, Sir Kadoorie proposed five percent, and Mr. Lin did not object. So how should the remaining shares be distributed? Mr. Lin, what are your thoughts?"

Lin Haoran smiled and said, "I have full confidence in the Daya Bay Nuclear Power Plant project. As for the shares, I only wish I had more, not less."

……

After more than three hours of consultation, the terms and conditions were finalized.

With the consent of all three parties, Guangdong Nuclear Power Investment Company, China Power Investment Corporation, and Hong Kong Electric Holdings Limited will jointly establish Guangdong Nuclear Power Joint Venture Company.

In terms of equity and investment, the total investment is US$4 billion, of which US$40 million is registered capital, accounting for 10% of the total investment, and the remaining US$36 billion will be financed through international loans. Mainland China holds 50% of the shares and invests US$2 million; Hong Kong Electric Group holds 45% of the shares and invests US$1.8 million; and CLP Power holds 5% of the shares and invests US$0.2 million.

Regarding financing arrangements, negotiations are needed with French export credit and other international commercial credit institutions. Any shortfall will be covered by loans from Hengsheng Group at the credit interest rate.

In addition, Lin Haoran said he could help apply for a preferential loan from Citibank.

Regarding the joint venture period, it will be calculated from the date of commercial operation of the first unit, totaling 40 years. Upon the expiration of the joint venture period, all assets of the nuclear power plant will be transferred to the mainland free of charge, and Hong Kong Electric Group and CLP Power will no longer enjoy any rights.

In terms of power allocation, during periods of power shortage in mainland China, priority is given to supplying mainland China; during periods of power shortage in Hong Kong, priority is given to supplying Hong Kong. All electricity transmitted to Hong Kong is settled in US dollars, and the electricity price is adjusted annually based on the inflation rate, exchange rate changes, and operating costs.

Regarding equipment and technical services, both nuclear power equipment and conventional island equipment will be sourced from the French company Framatome, with the specific procurement agreements to be negotiated by the Chinese side. CLP Power will no longer pursue the purchase of British equipment.

Regarding the terms of operation and management of the nuclear power plant, for the first ten years after the nuclear power plant is put into operation, Hong Kong Electric Group and CLP Power will be responsible for operation and management in proportion to their respective shares, and the general manager will be a staff member of Hong Kong Electric Group.

Ten years later, the mainland gradually took over the operation and management rights, and finally achieved complete independent operation.

Regarding nuclear power safety responsibilities, the mainland assumes all responsibility. Hong Kong Electric Group and CLP Power have the right to supervise the safe operation of nuclear power plants, but do not assume any safety responsibility.

Commercial risks are borne according to shareholding. In the event of project failure, the losses will be shared by all parties in proportion to their shareholdings, with the mainland bearing 50%, HK Electric Group bearing 45%, and CLP Power bearing 5%.

This clause was added at Lin Haoran's insistence. Originally, CLP Power was unwilling to take any risks, but Lin Haoran directly stated that if CLP Power was unwilling to take any risks, then it could withdraw from the project.

Ultimately, Laurence Kadoorie felt that since he held the smallest stake, a loss of five percent was entirely within the Kadoorie family's tolerance.

……

"Then, the basic terms of the joint venture are set. I'll have someone draft a letter of intent first, and once the legal counsel for all three parties is confirmed, the representatives of the three parties can sign the letter of intent!" Director Luo said, slightly excited.

He was eager to finalize the matter. This project had been a key provincial project for years, but there had been no substantial progress each year. As the person in charge, he was under a lot of pressure.

Now that Lin Haoran has made his move, all parties have agreed, the basic framework has been set, and all that's left is to follow the procedures.

Once the letter of intent was signed, Director Luo could finally breathe a sigh of relief.

Although a letter of intent is not a formal contract, it represents the sincerity and determination of all parties. With it, the project has direction, and the team below knows how to move forward.

A formal contract can only be signed and construction can only begin once all matters, including financing channels and the purchase contract for French equipment, are finalized. This cannot be rushed.

"I have no objection," Lin Haoran said with a smile.

“I have no objection either,” Roland Kadoorie nodded and said.

Now that things have come to this, he no longer hesitates.

Five percent of the shares may not seem like much, but it's not a small amount either. It allows for minimal risk while ensuring that CLP Power retains a place on the table.

Once the nuclear power plant is completed and electricity is transmitted to Hong Kong, the Kadoorie family will not only be able to share the profits, but also become partners with Hong Kong Electric Group, which is under the control of Lam Ho-yin.

This deal is a win-win situation no matter how you look at it.

What he didn't know was that today's meeting reduced his stake from 25%, which would have given him hundreds of billions in direct profits, to only 5%, a significant loss.

In Lin Haoran's previous life, it was the Daya Bay Nuclear Power Plant, a golden goose, that enabled CLP Power to maintain stable profit growth for decades.

With a 25% stake, the annual dividends alone amount to hundreds of millions to over two billion. Over the 40-year joint venture period, the Kadoorie family will receive at least tens of billions or even hundreds of billions of RMB in dividends, enough to keep them at the forefront of Hong Kong's business world and prevent them from being easily surpassed by newcomers.

Now, Laurence Kadoorie has personally handed over the majority of this enormous fortune to Lin Haoran.

Billions in dividends, just like that, gone! (End of Chapter)