Chapter 569: Chapter 319: Guide_2
Liu Zhida laughed heartily, "Chairman Wen is truly straightforward. Here’s the thing, this distressed asset package mainly consists of internet finance debts, with a total scale of 26 billion. We are now selling it off at a tenth of its value, which is 2.6 billion."
He paused, observing Chen Cheng and Wen Shulin’s reactions, "Of course, I know the risks are considerable, hence I wanted to see if Mr. Chen might be interested. After all, Mr. Chen has abundant experience in the overseas market, and he might be able to turn decay into a miracle."
Chen Cheng instantly understood what was packed inside this package.
"Our Mr. Chen focuses on tangible investments and steers clear of these things," Wen Shulin directly rejected on behalf of Chen Cheng, "Chairman Liu, if there’s a new project, I can help connect you again."
Faced with Wen Shulin’s refusal, Liu Zhida didn’t say much, just smiled, "Good, I look forward to working together in the future."
Chen Cheng gave a slight smile, "Good."
After everyone left, Chen Cheng asked Wen Shulin, "Is there money to be made here?"
"Spending 2.6 billion, but as long as we can recover one tenth from this package, wouldn’t that break even?" Wen Shulin smirked, "The rest would be pure profit."
She took a sip of champagne, "But, these internet finance debts may seem enticing, and a tenth of the price might seem like a great bargain, yet the waters are very deep."
"These kinds of distressed asset packages often come with a ton of bad debt, debt disputes, and complex legal issues."
"Many times, those seemingly valuable debts are probably already difficult to collect. The companies behind them, or natural persons may have already gone bankrupt or liquidated, or the assets might have been pledged multiple times. Even if you spend money to buy them, the subsequent costs of manpower, resources, and effort to sort through are huge and you might not be able to recoup the costs, perhaps sinking deeper into it, becoming the sucker."
She pondered for a moment, "I think Zhongjin threw out this asset package so easily, primarily to quickly release funds and increase the available capital for its various platforms."
"What does that mean?" asked Chen Cheng.
Wen Shulin explained, "Zhongjin has many subsidiaries and investment platforms that all need capital to operate. Disposing of distressed asset packages can quickly recover funds, replenish liquidity, and support the development of other businesses."
"It’s like a warehouse, filled with stagnant stock. Rather than letting these goods continue to take up space, it’s better to dispose of them at a low price and make room for new goods."
She continued, "Moreover, the main profit model of such platforms is the interest spread. Professional tasks still require professionals to handle them."
"The default rate for these kinds of loans has been continually increasing in recent years, which leads to a dramatic increase in the pressure of subsequent collections. At this point, they would delegate to law firms, third-party collection agencies, to reduce the pressure, but both the time cost and the collection cost are correspondingly rising."
"It’s like with your Wanbao Hall, there are some leftover dishes. It’s better to sell them cheaply to a company specializing in recycling slop than to deal with it yourself, saving time and effort."
"Lastly, if they personally sue these defaulters, it will increase the number of litigations, which is not conducive to the corporate image and reputation."
Wen Shulin chuckled, "Although you haven’t entered the circle, you should understand that in this industry, face is often more important than anything else."
Chen Cheng nodded, "It seems like a hot potato indeed. But why would Chairman Liu suddenly bring this up? Doesn’t he know the risks involved?"
"He might be testing you, to see your reaction and strength. If you showed interest, he might reveal more information, even seeking cooperation."
After hearing this, Chen Cheng couldn’t help but marvel at the complexity and subtleties involved.
"It seems every step in this circle is full of calculations and manipulation!"
Wen Shulin calmly said, "Previously, you were leading bond issues, dealing with both institutions and localities. Now, if you want to go into private equity, that means competing in the market for a bigger share of the pie. Naturally, some people would want to test you, even set traps for you."
As the two of them were talking, Chen Jin came over.
He greeted them with a smile, "Mr. Chen, Chairman Wen."
Wen Shulin gave a slight nod, and Chen Cheng was finally seeing a familiar face, which relaxed him a bit.
"What are you discussing?" Chen Jin asked curiously, "I saw Lao Liu talking with you both for quite a while."
Wen Shulin roughly explained the situation, and after hearing it, Chen Jin dismissively said, "Zhongjin has been in decline in recent years."
"In decline?" puzzled Chen Cheng, "But Zhongjin is a top investment bank in the country."
Chen Jin smiled, took a sip of his drink, and clarified, "A top investment bank, no doubt, but in the past few years, Zhongjin has seen serious factional strife and has lost a lot of talent. Lao Liu, although his position at Zhongjin is not low, is not a core figure either, and has limited resources at his disposal. His eagerness to sell off this distressed asset package is mostly to meet performance targets or to free up funds for other projects."
He looked at Chen Cheng, "Guess what Zhongjin is most famous for now?"
"For what?"
"Scandals," said Chen Jin bluntly, "Which intern lost her innocence today, whose wife is speaking out tomorrow. Endless gossip."
He looked at Wen Shulin, "Chairman Wen should be aware, right? Didn’t a story just break out recently?"
Wen Shulin put down his wine glass, "I’m not one of you big guys. I have no interest in those gossip news."
"Right, right, right, how could I forget that." Chen Jin chuckled, "Shall we go over and sit down? The leaders are all over there."
"Sure."
The three headed toward the small round table in front of the main stage, where a few impeccably dressed individuals were already seated.
Just by looking at their attire, you could tell they were big shots.
"Come, come, come, Mr. Chen, let me introduce you... This is..."
Chen Jin enthusiastically greeted Chen Cheng, introducing each of the leaders at the small round table to him one by one.
Wen Shulin also chimed in at the right moment, providing a few words about Chen Cheng’s background and Dili Private Equity.
"Xiao Chen." One of the leaders at the table, in his fifties and seated at the center, whom Chen Cheng had never seen before, was smiling continuously, "Finally meeting you in person. A young and promising man indeed!"
Chen Cheng smiled modestly, "Director Kang."
"Last time Xiao Chu came to see me, I did give a hand to your Beijing Reputation Alliance," Kang Liang said candidly, "But you guys really acted fast, tackling it from both ends to settle the turmoil."
In an instant, Chen Cheng connected the person in front of him with the "Uncle Kang" Chu Qin had mentioned, matching them up in his mind.
He set down his wine glass, "Leader, I must thank you for your strong support. Without you stepping in at the crucial moment, the Beijing Reputation Alliance might not have been able to get through that ordeal so swiftly. I, Chen Cheng, will keep your kindness in mind and will definitely repay it in the future."
Kang Liang waved his hand, a kind but authoritative smile on his face, "Xiao Chen, no need to be so formal. I’ve also heard about your accomplishments in the financial sector."
"Now that you’ve established Dili Private Equity, it represents a new beginning, as well as new challenges. In this circle, connections and resources are indeed important, but what’s even more crucial is to have a long-term vision and a stable strategy."
Chen Cheng nodded respectfully, "I will definitely keep your teachings in mind. Dili Private Equity is just starting out, and there is still much to learn and improve upon. I hope you can continue to provide guidance."
Kang Liang encouraged him, "As a young man, you need to have drive and resilience. The financial industry is fiercely competitive, but as long as you have the capabilities, you can certainly stand out."
"Thank you for the advice, I will keep it in my heart," Chen Cheng replied reverently.
Kang Liang asked with concern, "When is your company officially listing? I hear Xiao Chu has already gotten you the financial license, you should hurry."
"Definitely, definitely. I expect in half a year at the latest, the office address will be sorted out," answered Chen Cheng.
Kang Liang nodded, "Good, work hard. You have to live up to the name ’Dili.’"
"Yes, Leader."
After exchanging pleasantries for a while, Chen Jin took the opportunity to pull Chen Cheng aside, "Mr. Chen, what you did there was a bit lacking in decorum."
"What happened?"
"You know Lao Kang?"
"First time meeting him today," Chen Cheng replied.
"Then how did he..." Chen Jin changed his question, "Who’s really backing your private equity?"
Chen Cheng gave a faint smile, "Lao Chen, the way you ask, I don’t even know how to answer."
Hearing this, Chen Jin got the clue, "Mr. Chen, I must say. You’re definitely not just anybody! In the future, I’ll have to rely on you a lot more!"
Chen Cheng laughed, "Lao Chen, aren’t we best friends?"
"Right, best friends!" Chen Jin lowered his voice, "I’ll send you something else soon."
"Stop it, that’s enough."
Chen Jin gestured with his hands, "We’re brothers, no need to be polite, just listen to me."