I Become A Noble in England

"The current debt of DS Group is mainly denominated in pounds, with a total amount of more than 11.05 billion pounds. In addition, there are 3 billion US dollars in loans, which are all principal. Our interest is repaid on time..."

Soon, DS Group's Chief Financial Officer Brandon McCain gave detailed information on DS Group's current liabilities, which came from various acquisition financings and loans they had previously made.

Among them are——

When acquiring Standard Chartered Bank, it used its shares as collateral to obtain a loan of US$3 billion with an annual interest rate of 5% from Goldman Sachs.

The loan of £4 billion was obtained from Northern Rock Bank, mortgaging 55% of O2 Telecom shares, with a term of five years and an annual interest rate of 3%.

After Summit Media went public, it mortgaged its shares in Summit Media to borrow £1.55 billion from Standard Chartered Bank.

When acquiring the Gucci Group, it mortgaged its shares in Argos Retail Group, Woaw Technology, Argent Real Estate Group and 20 million shares of Google to Northern Rock Bank for a loan of 2.5 billion pounds.

It was still when the Gucci Group was acquired that a £3 billion financing loan with an annual interest rate of 6% was obtained from Standard Chartered Bank, using the Gucci Group's shares as collateral.

These are the debts borne by the DS Group itself, and other debts based on certain companies are counted separately.

It can be seen from this that the DS Group still has a lot of debts. The current exchange rate of the pound to the US dollar is around 1.75. Therefore, the US$18.5 billion that DS Investment Company obtained last year, even if it has some surplus now, if converted into pounds, will only be enough to repay the debts of the DS Group.

In September last year, the highest exchange rate of the pound to the US dollar was around 1.85, and the lowest exchange rate during this period was only around 1.70...

Because it is unclear what the attitudes of forces including the Rothschild family and the American Vanguard Group are towards him, Barron's strategy is to still make the DS Group bear a relatively large debt on the surface, while his funds are shorting the pound against the US dollar with extremely low leverage - less than three times leverage.

By now, the previous $18.5 billion in funds had become about $22 billion, which is about 12.57 billion pounds in British pounds. It was almost all the debt they had assumed, and there was still a little shortfall...

However, these debts do not have to be repaid in full, such as the 4 billion pounds borrowed from Northern Rock Bank using 55% of O2 Telecom shares as collateral. Not only is the annual interest rate extremely low, only 3%, but the term is also 5 years. It should be noted that in recent years, the exchange rate of the pound against the US dollar has remained above 1.7, but since 2009, this exchange rate has often fallen below 1.4. With such a low exchange rate, it is still very profitable to repay the pounds when the time comes while maintaining US dollar assets.

What's more, during the subprime mortgage crisis, Northern Rock Bank might even go bankrupt, and at that time this part of their debt... would be extremely advantageous in certain negotiations.

In addition, there are loans from Standard Chartered Bank. Although the annual interest rate is often higher than 5%, it is still cheap financing compared with the returns given to customers by Caesar Fund and Global Industrial Investment Fund...

Moreover, Standard Chartered Bank itself is controlled by the DS Group. These loans do not affect long-term holdings at all. The exchange rate of the pound to the US dollar has even reached 1.03 after 2022 in the original time and space. Compared with now, if it is denominated in US dollars, a large amount of pound debt can be repaid less...

Therefore, Barron decided to first return the US$3 billion financing that DS Group had provided to Goldman Sachs when it acquired Standard Chartered Bank.

After the money is repaid, the Standard Chartered Bank shares they hold will be very safe, and it can also ensure that other loans from Standard Chartered Bank can continue.

Otherwise, if someone starts with Standard Chartered Bank and after he invests the funds elsewhere, the other party controls Standard Chartered Bank and demands the repayment of those loans, although it will not be a serious blow, it will be troublesome and will face some related investigations.

The next step is to repay the £2.5 billion loan that DS Group obtained when it acquired Gucci Group by mortgaging its shares in Argos Retail Group, Woaw Technology, Argent Real Estate Group and 20 million shares of Google from Northern Rock Bank.

The main reason is that the assets pledged for the loan, including Argos Retail Group and Woaw Technology, were not worth too much at the time, but are now preparing for IPO. Even the 20 million shares of Google stock are worth nearly US$8.1 billion - Google's current market value has exceeded US$112 billion.

Therefore, repaying this part of the loan will make these pledged shares available for use, thereby increasing the DS Group's pledgeable assets.

As for the remaining debts, they can be left aside temporarily and the remaining funds can be invested in other areas.

After repaying these loans, more than $14.6 billion will remain.

Next, after O2 Telecom submitted its IPO application, they also prepared to sort out O2 Telecom's financial situation.

In the earliest days, when DS Capital wholly owned O2 Telecom, they issued 1 billion pounds of corporate bonds to repay part of the 5 billion pounds of high-interest financing they obtained from Barclays Bank and Goldman Sachs Group when they acquired O2 Telecom.

So far, O2 Telecom has paid off this part of corporate bonds.

In addition, before this, the Saudi Public Investment Fund also purchased 1 billion pounds of O2 Telecom convertible bonds. These bonds can be converted into O2 Telecom shares at the issue price when O2 Telecom goes public.

Similarly, when O2 Telecom acquired the 51% stake in Czech Telecom held by the government, the US$3.5 billion in funds provided by Caesars Fund to it were also in the form of convertible bonds, which would be converted into company shares when O2 Telecom went public.

Finally, when O2 Telecom was acquiring the remaining shares of Czech Telecom, it borrowed 2 billion pounds from the Royal Bank of Scotland. This part of O2 Telecom's debt was insignificant compared to its assets at that time.

There is no mistake in the poem, post, content, and read the book on 6, 9, and bar!

In the past year, O2 Telecom has had more than 40 million users, annual revenue of more than 30 billion euros, and gross profit of more than 3.5 billion euros - this is even when O2 Telecom is developing new markets and investing a lot of infrastructure funds!

At this time, DS Group holds 100% of O2 Telecom's shares, and sets the total share capital at 5 billion shares. The IPO price is 5 pounds per share, and the market value of 25 billion pounds is equivalent to O2 Telecom's current size, profitability and expectations. This is not set at random. For example, France Telecom has more than 60 million users worldwide (some of them are users in French countries, and the quality is not as good as O2 Telecom's European users), with annual revenue of about 45 billion euros and gross profit of about 50 billion euros. Its market value is nearly 60 billion US dollars, equivalent to about 34 billion pounds!

According to O2 Telecom's current development, in 2006, because its investment in infrastructure will be reduced compared with before, and the increase in users and profits will begin to approach the level of France Telecom in these values, so the market value of 25 billion pounds is already very "restrained".

Therefore, according to the previous agreement, the Saudi Public Investment Fund's 1 billion pounds convertible bonds will be converted into 200 million O2 Telecom common shares at a price of 5 pounds per share.

The $3.5 billion of convertible bonds held by Caesars Fund will also be converted into 400 million O2 Telecom common shares at a price of £5 per share.

Plus O2 Telecom's upcoming public sale of 1 billion shares, including 500 million new shares...

After the IPO, O2 Telecom's total share capital will be 6.1 billion shares, of which DS Group will still hold 4.5 billion shares, accounting for about 73.77%; Saudi Public Investment Fund will hold 200 million shares, accounting for 3.28%; Caesar Fund will hold 400 million shares, accounting for 6.56%...

Of the 1 billion public shares issued by O2 Telecom, DS Group will sell 500 million shares and there will be another 500 million new shares.

If the IPO is successful, DS Group will sell these 500 million shares of O2 Telecom and obtain 2.5 billion pounds of funds; in addition, O2 Telecom will also raise 2.5 billion pounds of funds by issuing new shares.