Australian Storm 1876

  Chapter 76 The Richest Farmer

  Finally count

  It has been a year and a half since returning from North America, and the merger plan that was originally planned has finally seen the eyebrows, which is really gratifying!

  Fortunately, Fischer, a local snake operating from it, persuaded American shareholders to agree to the introduction of Australian funds to save this company on the verge of bankruptcy.

  Only by Li Fushou, it is difficult to complete difficult cross-border mergers and acquisitions.

Detroit Cargill Steam Machinery Company is a large and medium-sized enterprise with more than 1,100 employees. It mainly produces steam machinery products for the European and American markets, from small steam engines for knitting and wool spinning enterprises to steam engines for mines. A powerful company.

  Don’t talk about the technology. All of them are imported from European technology powerhouses such as Britain, France and Germany, and their own scientific research and development capabilities are very limited.

  In recent years, European countries have been lax in preventing civilian patent technologies. Wild boars with large loopholes can get in, and the awareness of civilian patents is not strong.

  The strongest patent awareness is the Edison Electric Light Company, which was just established in 1878 in the United States.

  In the brightly lit nights of Valley Town and Brisbane City, the electric light products originated from the Edison Electric Light Company, so I won’t repeat them here.

  Li Fushou took a closer look

  Trans-ocean letter from the United States, with a full set of transaction documents attached, and after being reviewed by the American lawyers of Normandy Import and Export Corporation, the transaction documents and process are reasonable and legal, and there is no problem in this regard.

Cargill Steam Machinery Company was established in 1859. It was originally a small workshop for repairing steam machinery. Under the painstaking management of the old Cargill, it finally became a powerful steam machinery manufacturing plant. The annual profit reached millions of dollars in the most glorious period. .

  Due to the fact that Detroit is full of strong players in the machinery industry, fierce competition, and serious product homogeneity, Cargill has gone downhill after experiencing its initial glory.

  After the sudden death of old Cargill due to illness, Cargill Steam Machinery Company was caught in a family property litigation battle, which was gradually declining.

  In recent years, it has suffered serious losses. In 1876, 1877 and 1878, they lost 276 thousand U.S. dollars, 455,400 U.S. dollars, and 376,100 U.S. dollars respectively. The company laid off a large number of employees to cut expenses, but fell into deeper operating difficulties.

  From the perspective of financial status;

  Cargill Steam Machinery Company is really terrible, with a debt ratio of 217% and foreign debt as high as 3.4 million US dollars. The company's employees have been reduced from more than 1,100 at the peak to more than 430, and production capacity has shrunk greatly.

  As a result, the company’s share price has shrunk sharply, from its peak of 3.1 US dollars per share, with a total value of more than 17 million US dollars, to the current net value of 6.5 cents per share, with only a few hundred thousand US dollars left.

  Because the Kargil family controls nearly 70% of the equity, the merger of the company, several children of the Kargil family are unable to get around.

  Fortunately, the old Fischer persuaded them that the Australian Red River Valley is willing to take over 68.3% of the Cargill family’s equity with 566,000 US dollars and assume corresponding debts in proportion to the shares to complete this rare cross-border acquisition.

  This price is very sincere. Compared with the current stock price of chicken feathers, it has a premium of nearly 80%, which is the key to completing the transaction.

   privately

  Normandy has collected 7.23% of the equity of Cargill Steam Machinery Company through various channels, and the two together reach 75.53%, with absolute controlling rights.

  In addition, the third largest shareholder Fischer Import and Export Company holds 8.5%, and Red River Valley United Fischer Company firmly controls Cargill Steam Machinery Company.

  Old Fischer revealed in the letter;

  In the warehouse of Cargill Company, there are a large number of small and medium-sized steam machinery piled up, the number is as high as thousands of sets, due to the serious lack of sales due to backward technology, only this part is worth millions of dollars.

  Long-term pain is not as good as short-term pain.

  After taking over, Phil plans to sell this batch of technologically backward products at half price and quickly withdraw funds for production.

  The negative effect of this is also obvious. The company's book will have a bigger hole, and the loss in 1878 may be as high as millions of dollars.

  Comprehensive considerations

  It is worthwhile to do so, and Kargil Steam Machinery Company has the potential to re-emerge.

  The company has a complete set of steam machinery production equipment, complete small and medium-sized steam machinery production capacity, experienced staff, huge plant and terminal facilities and other fixed assets, which have considerable potential.

  This is the case for companies that are on the verge of bankruptcy. If there is no suitable taker, the valuable production equipment is all scrap iron, and it is worthless. You can only go back to the furnace and turn it into molten iron.

  Cargill’s problem lies in the lack of proper management, lack of capital injection, severe aging of product technology, weak market competitiveness, poor sales channels, and failure in the 1878 U.S. Navy ship power tender, with no revenue.

  If there is a suitable receiver, injecting a sum of funds to update equipment and introducing the latest steam machinery technology in Europe today, it can revitalize the huge amount of deposited assets and rejuvenate this company that has already embarked on the road of sunset.

  Red River Valley and Fischer Company joined forces to take down Cargill Steam Machinery Company. It is definitely a beautiful home run.

  Red River Valley itself has iron ore, coking coal plants and coal mines that are in urgent need of expanding production scale, as well as a large number of factories and heavy industry enterprises. It is a super customer and has a great demand for steam machinery products.

  It is not sensitive to old-fashioned steam machinery products with high energy consumption. Anyway, it burns coal, and its own coal mines are more sensitive to prices.

  If you can get a large number of steam engines at half price, it will be beneficial to both parties.

  Li Fushou carefully considered and signed his name on the legal documents of the merger and acquisition, thus completing the last step.

  M&A funds will be paid by Normandy. In addition to the initial payment of 566,000 US dollars to take over the 68.3% equity of the Cargill family, the corresponding transaction tax will also be paid.

  According to the arrangement;

  Cargill Steam Machinery Company will apply for delisting from the New York Stock Exchange, and Red River Valley and Fischer will acquire investors’ stocks and rename the company to American Red Mountain Machinery Company. The equity ratio between the two parties is 8:2.

  Only after the completion of this process, the original Cargill Steam Machinery Company's stock products can be sold at low prices, most of which will be taken over by the Red River Valley, and a small part will be sold through the channels of Fischer Import and Export Company, and the funds will be quickly returned.

  The related-party transactions of delisted companies do not involve the transfer of interests, and will not cause disputes and lawsuits among the company's small and medium shareholders. This is the main reason why Cargill Steam Machinery Co., Ltd. was difficult to take this measure at the beginning.

  After the above steps are completed

  Red River Valley and Fischer will jointly inject millions of dollars to purchase advanced steam machinery production technology and equipment from Europe and the United States, update product lines, train workers, and other necessary expenses.

  In this big deal, Li Fushou will pay two million US dollars in total, including the acquisition of equity, take over a large number of outdated steam machinery with high energy consumption, and inject up to 800,000 US dollars in cash flow.

  Thanks to the lucrative coking coal transaction, it is not difficult for Li Fushou to take out this huge sum of money. Instead, he has a relaxed mentality that the money is finally spent.

After the Hongshan Coking Coal Plant was put into operation at the end of December 1877, the production capacity continued to expand. From the initial set of coking coal production lines with an annual output of more than 70,000 tons to the No. 2 and No. 3 production lines put into operation in May 1878, the production capacity was rapid. Expand to a scale of 220,000 tons.

  As of early October

  No. 4 and No. 5 production lines have been ignited for production, and the annual production capacity has been expanded to 400,000 tons. The No. 6 production line is still under construction and is expected to be ignited and put into production before the end of the year.

  As a hot product in the international market, high-quality Australian coking coal has been supplied to North America, Fusang, Manchu, India and the Straits Settlements of the British Empire.

  Only this item

   has brought Li Fushou a huge income of millions of dollars, and he is known as the richest rancher in Australia, which really surprised everyone.

  In just three years, this young Chinese gold digger rose rapidly, deducting a dazzling wealth myth.

  There are those who are jealous, and those who are jealous, but everyone has to admire Li Fushou's outstanding talent and clever vision.

   was the first to build the world’s first hydroelectric power station, thus opening an extraordinary path of life.

  The unique topography and landforms of the Australian continent, there are few places suitable for the establishment of large-scale hydroelectric power stations, and the Red River Valley is just one of them.

   Seeing this Chinese rancher who makes money like a gold mountain and a silver sea, the white man said that it is fake not to be jealous, and eagerly looking forward to a piece of the coking coal feast, but after a round of inspection, he was extremely disappointed.

  Li Fushou’s success is difficult to replicate, and the superior transportation conditions of the Red River Valley cannot be replaced at all.

  The Australian continent has countless coal and iron resources. What is lacking is the large amount of electricity necessary for coking coal plants. There are two possible solutions: thermal power generation and hydropower generation.

  The necessary conditions for hydroelectric power generation are very harsh. There must be a large enough drop for power generation, abundant water resources, and convenient transportation channels to import large amounts of coking coal overseas. These conditions are indispensable.

  The Australian continent is the flattest continent in the world, with eastern mountains, central plains, and western plateaus.

  The highest peak, Kosciusko Mountain, is 2228 meters above sea level, and the lowest point is Lake El in the middle of the mainland. The lake surface is 16 meters lower than sea level.

  In the mainland, near the sea is a narrow beach with gentle slopes, gently slanting westward and gradually forming a plain.

  Since most of the inland areas are arid and semi-arid areas, there is no possibility of hydropower generation by nature, and the only large watershed areas along the coast.

  The mountains are vertical and horizontal, and the water is abundant. Before entering the coastal plain area, there is enough drop to meet the innate conditions for hydroelectric power generation.

  The highest peak of Kosciuszko Mountain is located in the southeast corner of New South Wales, Australia. It covers an area of ​​about 6,900 square kilometers. It has dense forests and turbulent rivers, and the scenery is extremely beautiful.

  The area has the prerequisites to build a reservoir, and it also has abundant coal resources. The biggest problem is transportation.

  How to transport the produced coking coal?

  There is no navigable Brisbane River here. The 10,000-ton ship can dock at the valley town wharf, load goods from the wharf and sail directly to the North American or East Asian markets, in exchange for wealth.

  How to transport thousands of tons of coking coal out? Is it to build a railway in a mountainous area, or to transport it out in carts and carts?

  There are indeed rivers leading to the bay, and there are as many as 10, but unfortunately because of the complex geological conditions of the mountainous areas, they are not navigable.

  The path of hydroelectric power generation is not feasible. The only way to build thermal power plants like Europe and North America is to supply large amounts of electricity demand for coking coal plants.

   Thermal power plants can be built anywhere, but there is only one shortcoming, and that is expensive.

  Expensive construction costs, expensive large-scale thermal power generation equipment, expensive operating costs, and expensive production costs. Otherwise, the high-quality coking coal exported by Germany would not sell for US$20 a ton.

  And one ton of steel produced in Germany is two hundred and thirty-four dollars a ton.

   Therefore, Li Fushou is now the envy and hatred of all whites in Australia. The coking coal plant is faster than printing money.

  Envy belongs to envy, jealousy belongs to jealousy, there is no use for eggs.

   Tens of thousands of Chinese in the valley town gather together. The Red River Valley also has a lot of armed abilities. The Chinese militia is well-trained, like a hedgehog.

  One sentence; it's a climate.

  (End of this chapter)