Chapter 70: Trip to the United States (6)

United Group is famous, and even the Fast and Furious series of United Motorcycles also appeared in New York this time, which is not inferior to Harley-Davidson in the United States. Wall Street has long been thinking about whether it can get a share of the pie. Al Smith and several major investment banks have invited United Group to go public in the United States more than once, believing that this is worthy of the status of United Group. At the same time, they said that they would pay a good price for the shares, but Contini always said that the company is still in the expansion stage and it is better to consider this matter after the situation stabilizes.

However, he did not completely refuse. After all, some industries can be split and listed. The capital market is most interested in United Motorcycles. Goldman Sachs in this era is still a very conservative family business, but Merrill Lynch is already a giant in the investment securities industry. With its headquarters in New York, it is impossible not to give Merrill Lynch a little sweetness. In addition to Merrill Lynch, there are JP Morgan, Lehman Brothers and Bear Stearns, which was just established. Contini sighed when he thought of Merrill Lynch, Lehman, Bear Stearns, these giants that experienced the 1929 economic crisis, and collapsed in 2008.

But now it's not even 1929, and 2008 is even more of a distant future.

This time, Antonio first found Citibank for financing. Citibank attached great importance to this negotiation, and Contini chose Citibank for the negotiation first after careful consideration:

First, because Citibank was not the giant it later became, it was only a medium-sized bank reorganized from the City Bank of New York. Since Al Smith had to give face, he had to start with the local snakes in New York State. Citibank also received a call from the governor and tried to make the negotiation as successful as possible;

Second, because Citibank was more open-minded at this time, although it was not allowed to open branches across states in the United States at this time, Citibank was obviously not restricted by this ban, but opened branches in Singapore, the United Kingdom, China, Hong Kong, Japan, the Philippines and India. Contini believed that if Citibank wanted to open a branch in Italy, he could provide convenience.

Thirdly, because Citibank is currently jointly controlled by the Stillman family and the Rockefeller family, and the United Group has just signed a contract with Standard Oil, this is almost a transfer from the left pocket to the right pocket for Citibank, and security will be fully guaranteed.

So the negotiation is a package of strategic cooperation: on the one hand, it is to discuss the possibility of Citibank landing in Italy, and on the other hand, it is to discuss the possibility of Citibank serving as the main financing bank of the United Group in the United States.

The former cooperation intention was quickly reached, and the latter cooperation intention encountered a little setback.

"You want to use some of your shares as collateral for the loan?" Citi's vice chairman in charge of negotiations, Akelman, said hesitantly, "But the stock price fluctuates greatly. If you are not careful, it may cause a liquidation, which is not good for both parties..."

"In theory, it's right, but it depends on which stocks." Antonio opened his handbag proudly and took out a large stack of warrants, "Here are 1 million shares of American Radio Corporation held in a dispersed manner, with a market price of $41... We think it will be easy to rise to $50!"

Akelman's eyes were straight when he saw these 1 million shares of American Radio: Everyone on Wall Street knows that the most undoubted bull stock this year is American Radio, which started to rise from a little over $2 and has now reached $40. Even so, there is almost no sign of a correction, and the daily trading volume is very small-all shareholders hold on tightly and refuse to let go. If Citi buys 1 million shares now, it is guaranteed that the stock price will break the $100 mark in an instant.

"How much do you want to borrow?"

"40 million US dollars." Antonio raised 4 fingers, "Use these 1 million shares and 50% of the shares of United Motor as collateral."

"This may not be enough, because even if we accept the stock collateral, it will be discounted..."

"Okay..." Antonio smiled and took out a stack of stock certificates, "Add another 500,000 shares of General Motors!"

General Motors is also a big bull stock... Acolman swallowed his saliva and cursed in his heart: How can the Italians be so lucky? Why do they have all the bull stocks?

"This..."

"Not yet?" Antonio smiled, "Our contract with Standard Oil is worth 4 million US dollars. We can not take out this 4 million, and Citibank will directly pay it - if the contract only completes 1 million, then the other 3 million will not need a loan."

"Can our bank also take over the business you gave to Wright Company?"

In fact, Acolman also wanted to take over the business of Westinghouse and General Electric, but he knew that this was impossible. If you don't have the size of a shark but want to eat alone on Wall Street, you will definitely be beaten. It will be bad if you attack in groups. The amount of the order of Wright Company is not large, so you can take it. The Standard Oil business is what Citibank should take, and he is not polite about it.

In this way, the collateral submitted to Citibank exceeded 60 million US dollars, and the United Group could only take out more than 30 million. Acolman calculated in his mind and thought that the risk was basically controllable - it was almost impossible for the two stocks of American Radio and General Motors to fall by half in a short period of time. So he said carefully: "Okay!"

"Then let's talk about the interest rate..." Antonio smiled, "We have inquired, and the current standard interest rate in the US market is 5-5.5% for 5 years, and lower for 3 years, but considering our amount, should we give a preferential discount?"

"My authority is only to give 5.1%."

"4.8%!"

"5%! The lowest is too low..."

"4.9%! It can't be higher. After all, I have to provide assistance for Citigroup to launch in Italy." Antonio said, "If not, I have to find Chase Manhattan Bank?"

As soon as he heard about Chase Manhattan, Acolman frowned: Chase Manhattan is an industry of the Morgan Group. Now Morgan and Rockefeller are evenly matched opponents. It's nothing if Citigroup loses to Chase Manhattan, but if Rockefeller loses to Morgan Group, then I, the vice chairman, will be in trouble.

He struggled for a while and finally said: "I went to the board of directors to ask for permission, and I personally agreed."

This sentence was enough. Antonio laughed and stood up to leave - if it was Contini's negotiation, he would definitely stop at 5%. Don't underestimate this 0.1%. 40 million a year means saving 40,000 US dollars. ——Enough to buy more than ten Cadillacs and give them away!

The next day news came from Citi: Sign! The only requirement was confidentiality, and Citi didn't want to be the target of public criticism.

The United Group naturally agrees with this, and Contini does not want to be ostentatious.

After signing, Contini and Antonio laughed - they had a total of 4 million shares of American Radio in their hands, put 1 million to Citigroup, and still had 3 million that could be used as collateral.

On September 3, United Group and Bank of America signed a strategic cooperation agreement: a loan of US$35 million, with better conditions than Citigroup, with only 4.8% interest. It’s not because Bank of America is more talkative, but because Bank of America is not only larger than Citigroup, but Bank of America was originally an Italian bank run by Italian immigrants. In the early days, it mainly engaged in the deposit business of Italian immigrants from the Pacific coast states. For the overbearing president, Italy has a stronger sense of domestic power and strength, so with another 0.1 percentage point, these tens of thousands of dollars can be regarded as paving the way for the country... In the same way, this agreement is also kept secret.

On September 7, United Group and Chase Manhattan signed a contract. Although it is kept secret by the outside world, it cannot be kept secret forever. Of course, giants like Morgan also have to get a share of the pie. Besides, Citigroup gave you a loan, Bank of America gave you a loan, and you Don’t come to Morgan for a loan? Do you look down on us? Besides, Contini was fond of more loans, so he took out a $45 million loan from Chase Manhattan.

After much back and forth, a total of US$120 million in loans was obtained, which not only mortgaged all the orders and equipment that United Group planned to purchase in the United States, but also mortgaged United Steel, United Shipbuilding, United Motorcycle, etc., and Conti In addition to the mortgage required by the market for the nearly 300 million U.S. dollars of stocks held by Ni, the remaining nearly 200 million U.S. dollars have also been mortgaged.

In other words, except for the small sum of US$100 million that the domineering president received, everything else is controlled by Wall Street. Now United Group works for Wall Street tycoons - not only can it not make money, but it has to hand over nearly 6 million a year. Interest!

There is one thing that Antonio finds strange: Why does the young master only have a 5-year loan? Shouldn’t the loan be for 10 or even 20 years? The longer it is, the smoother the transition will be and avoid having to refinance all the time.

Contini only smiled at this but did not say anything. Only he knew the real reason: it is now 1924, and in five years, um... 1929!