After the internal company meeting, Su Yi discussed the preliminary plan to acquire 'FXCM International' with Wang Huaijin and finally decided that he, Wang Huaijin, and several other negotiation team members would go together to 'FXCM International''s headquarters in the Cayman Islands tomorrow.
Then, the next day, Wednesday, July 6th, Su Yi, Wang Huaijin, and their group departed from Modu by plane.
While Su Yi and his group were en route to the Cayman Islands, preparing to seek a direct meeting opportunity with the senior management of 'FXCM International' Group's board of directors.
At this time, at the 'FXCM International' Group company headquarters.
An internal board meeting concerning the group's future fate was also being held urgently.
"Tassia, after accounting for the 'referendum black swan' event, how long can the group's liquid funds sustain the company?" During the board meeting, board member Noel asked Tassia, the group's Chief Financial Officer, "Can we still secure quick loan financing from banks or other financial institutions?"
Tassia replied: "Our group's net cash flow is currently $1.152 billion, of which about $800 million is short-to-medium-term debt. If we pay the total of $1.123 billion for the many long-position margin call accounts under our company during this 'referendum black swan' event, our group will have less than $30 million left in our accounts.
This amount of liquidity is only enough to sustain us for one to two months. As for seeking quick loan financing from financial institutions within these one to two months. Given our group's qualifications and rapidly soaring debt ratio, I believe it would be quite difficult to quickly pass the loan approval of financial institutions."
"What if we delay paying this huge loss caused by investor margin calls?" Board member Patrick asked, "What would be the consequences?"
Tassia remained silent.
Beside her, Isaac, 'FXCM International''s President of Market Operations and also a board member, had already responded: "If we delay or refuse to pay this massive loss on positions, citing investor margin calls and abandoned accounts, then these losses will be transferred to other trading institutions that provide us with trading seats or closely cooperate with us.
In other words… Although doing so would transfer our company's risk. However, this would be a devastating blow to the reputation our company has built over many years.
After all, investor margin calls and abandoned accounts, leading to this risk, are due to our group's internal risk control management not being in place; it is an internal risk issue of our own company.
Once this risk is transferred, and the excess losses resulting from margin call positions are refused payment. Then, although our company might avoid the risk of bankruptcy, future business operations would be impossible.
It can be said that if we do this, all our previous partners will sever their cooperation with us, all dedicated seats on major global exchanges currently used by our company will be suspended, and our company will be blacklisted in the industry, losing all its customer base. I believe doing so would have more severe consequences than company bankruptcy."
"The extensive long-position margin call issues caused by our company's internal risk control problems, this risk must certainly be borne independently by us." Board member and company chairman Stewart pondered for a moment and said, "Among all the current problems to solve, company reputation is definitely the most important. If we lose this foundation, then the very basis of our company's survival will be gone."
"Can we find a way to recover some debts from the group of investors who had margin calls and abandoned accounts?" Noel asked.
Isaac replied: "We are already doing that, but even though we have investors' personal information and contact details, recovering debts caused by such margin calls is extremely difficult.
Moreover... our investors come from all over the world. Although relevant laws and regulations can support us, the time and capital costs of recovering debts from investors are too high; it's like distant water cannot quench a nearby thirst."
"Then it seems we can only seek external financing," Patrick sighed softly.
"Selling equity and seeking financing from other investors is definitely the fastest way," Isaac said, "and this also benefits our company's future development, preventing an excessive operational burden."
"How many institutions have shown interest in us and made initial contact so far?" Stewart asked.
Isaac replied: "A total of four. Among them, there are two Wall Street capitals, one is our direct competitor, and the other... I don't think anyone would guess who it is."
"Who is the unexpected one you mentioned?" Stewart asked.
Isaac smiled and said: "It's 'Huayi Capital,' the Chinese-funded institution that once opened a large number of short positions in our company and made billions of dollars in profit from this 'pound black swan' event."
"It's this institution, surprisingly." Noel's face instantly showed surprise, and he asked, "What are the conditions offered by this institution?"
Isaac replied: "Compared to the four institutions that have contacted us, 'Huayi Capital' has offered relatively more sincere conditions. And after preliminary discussions over the phone, their company's President Su, and his team members, are already en route."
"What are the specific conditions offered?" Stewart asked.
Isaac replied: "I spoke with President Su from 'Huayi Capital' a few hours ago. Their intention seems to be a full acquisition of our group, and they are willing to maintain all existing operational models and all company employees after the acquisition."
"What valuation does President Su have for our group?" Stewart continued to ask.
Since the group has reached this point and cannot avoid the fate of being sold, he naturally wants to find a good buyer and a good price for the company.
Moreover, the other party explicitly stated that even if the acquisition is successful.
There would be no adjustments to the group's existing operational model, personnel configuration, or organizational structure, which was very appealing to him.
Isaac replied: "I sounded out President Su, and although he didn't state a specific acquisition negotiation price, he indicated that it would be higher than other institutions' offers."
"Since President Su has considerable sincerity, let's engage with them and see," Noel said.
Currently, the group's operating conditions have deteriorated drastically, with a complete collapse of its capital chain, and it is almost in a state of insolvency.
His shares, if the company is not sold, would be worth very little.
Therefore, from an internal choice perspective, since there is a good buyer, he is naturally willing to sell his shares.
He also supports selling the entire company.
"What about the others?" Stewart's gaze swept across the other board members of the group.
Patrick hesitated, thought about the current predicament facing the group, and sighed softly, saying, "If we can only rely on external financing to solve the current difficulties, then we can only support it. Alas... our company suffered a huge loss from the 'Swiss franc black swan' last year. We should have been vigilant and improved our risk control system back then."
"Saying these things now is no longer helpful," Stewart replied, immediately turning his gaze to Isaac and continuing, "Then, according to everyone's unanimous opinion, let's first see their sincerity."
Isaac nodded.
Afterwards, once the board meeting concluded, Isaac called Su Yi again.
Subsequently, when Su Yi and his group arrived in the Cayman Islands, Isaac and 'FXCM International''s core senior executives had already been waiting for a long time.
(End of Chapter)