Chapter 1131: The Giant Latam Sovereign Debt Pit

Xia Yu's gaze swept across the faces of Wu Siyuan and Jiang Zhiqiang.

He smiled and asked, 'How much cash flow does your respective company have at the moment?'

Wu Siyuan answered first: 'The box office split of E.T. the Extra-Terrestrial has not yet arrived. Apart from that, the company has more than 230 million Hong Kong dollars in funds.'

Jiang Zhiqiang then said: 'Chairman, Universal Circuit's cash flow is even greater. Even if we exclude the box office revenue of E.T. the Extra-Terrestrial, there is still more than 410 million Hong Kong dollars in cash.'

From the cash flow of the two companies, it can be seen that it is too difficult for other competitors to fight back.

Xia Yu smiled and said, 'It seems that you will each be able to complete the acquisition.'

Jiang Zhiqiang nodded and replied, 'Yes, although the net assets of Shaw Brothers have not been carefully audited, they are probably worth just over 100 million Hong Kong dollars, which Universal can easily absorb.'

Wu Siyuan continued, 'Shaw's film studio, Shaw Yifu will definitely not sell it. He still needs it to make TV dramas. After excluding the film studio, the value of Shaw Brothers Pictures is even lower, with most of the value concentrated in intangible assets such as personnel. After this loss, I estimate that around 50 million Hong Kong dollars will be enough to take over the entire Shaw Brothers Pictures.'

Xia Yu smiled and nodded, exhorting, 'Since you all have a plan and it will be so beneficial to the company, then go for it.'

'Compared to Golden Harvest and other competitors, you will pay more if you want to acquire it, so you need to pay more attention to the specific acquisition.'

'We understand!'

Wu Siyuan and Jiang Zhiqiang responded in unison.

...

Just as public opinion in Hong Kong was dominated by the change of ownership of the Shaw Brothers film empire,

What the people of Hong Kong didn't know was that Xia Yu had completed another major event in the global film market.

On June 25th, Coca-Cola, with the financial support of Citibank and Wells Fargo, completed the privatisation of one of Hollywood's giants, Columbia Pictures Industries, for a price of 750 million US dollars, a 200% premium.

Once the news was announced, the already surging American film industry set off another huge wave.

Due to the way the shares were handled, on the surface, Polaris Capital is only a 13% shareholder of Coca-Cola, so no one knows that Xia Yu's influence in Hollywood has now surpassed Warner Bros. and is in first place!

After MGM merged with United Artists, the eight major Hollywood giants have actually become seven.

Now, two of the seven giants are actually controlled by Xia Yu.

With the support of MGM and Columbia Pictures, Universal Studios and Galaxy Studios will continue to thrive!

Amidst all the commotion,

Xia Yu quietly arrived at his Galaxy Fund.

Since the last time he led the Galaxy Fund to fight a major battle in the international crude oil market and made a fortune, the Galaxy Fund has not been involved in any major battles for a long time.

Although the actions of the Galaxy Fund are still more dangerous and more profitable than those of Bright Fund and Jiuding Securities,

However, Liu Yao and the others could not feel any excitement, and could even achieve a state of absolute calmness and equanimity when investing hundreds of millions or even billions of dollars.

It was like having seen Mount Everest, and being unable to be stirred by the sight of any other mountain.

'Boss!'

'Boss!'

Amidst the greetings, Xia Yu arrived at his office and summoned the senior management of the Galaxy Fund:

Liu Yao, Xue He, Song Yang, Li De, Tang Yong, Ma Kai, Wang Gang, Liu Wei and others.

After everyone had arrived, the atmosphere in the office gradually heated up.

Xia Yu's gaze swept across the faces of the crowd, and Xia couldn't help but be a little lost in thought.

I still remember when Galaxy Fund was established in a low-key manner back then, these people all seemed to have a lot of room for improvement in his opinion. Many of them seemed a little immature, with quite a few flaws.

But now?

Everyone is in excellent spirits, full of energy, with deep, determined gazes. Their steady, astute demeanour emanates from within.

This means that everyone is confident in themselves, a clear sign that there is no capacity crisis.

Xia Yu came back to his senses, and with a smile, he praised, 'Seeing everyone in this state, I feel at ease about the next move!'

Hearing this, Liu Yao and the others couldn't help but smile.

'This time, I will lead everyone to take action again and create new glory!'

'As for the goal of the action, you have probably guessed it based on the task I assigned to you earlier.'

'So I won't say any more unnecessary nonsense, everyone just read the information in your hands and discuss it together.'

'Liu Wei! Distribute all the sorted materials.'

'Okay!'

After Liu Wei had replied, he got up and distributed the two thick stacks of materials from Xia Yu to everyone one by one.

Except for Xia Yu, who had already read it once, none of them had read all of it, and they only had a partial understanding of the situation. This time, they would gain a comprehensive understanding.

After receiving the materials, Xia Yu did not say a word, and directly took the lead in flipping through the materials.

For a while, the entire office was filled with nothing but the sounds of breathing and the flipping of pages.

These materials were detailed information on the debt markets of developing countries around the world, which Xia Yu had spent a great deal of manpower and resources collecting and collating.

The amount of outstanding foreign debt of developing countries soared from 125 billion US dollars in 1972 to 626 billion US dollars in 1982.

Among them, the outstanding debt of 19 Latin American countries such as Mexico, Argentina, Brazil, Chile, Colombia, Peru, and Venezuela totalled 328.7 billion US dollars.

This accounted for 52.5% of the outstanding foreign debt of developing countries.

More than half!

As of the end of 1981, US banks alone accounted for 41% of bank loans to Latin American countries, and these loans were highly concentrated in the hands of a few large banks, with 24 banks controlling more than four-fifths of these loans.

The proportion of loans to Latin American countries from European and other banks was even higher, at 48%, or $1,577 billion.

Of the European countries' market share of loans to Latin America, the UK had the largest share, at 24.8%, nearly a quarter of the European share. Even in the total outstanding debt of Latin American countries, it accounted for more than 10%, reaching 11.9%, or $39.2 billion.

These loans are concentrated in the hands of Barclays Bank and Westminster National Bank. Barclays alone accounts for 34.9% of the UK's share, with total debt of 13.68 billion US dollars.

The amount of debt of Latin American countries is also ranked.

The first echelon is Brazil, Mexico, Argentina, Venezuela and Chile.

Brazil's foreign debt balance was 91.3 billion US dollars, Mexico was second with 87.6 billion US dollars, Argentina was third with 43.6 billion US dollars, Venezuela was fourth with 35.06 billion US dollars, and Chile was last with 17.16 billion US dollars.

The total foreign debt balance of the five countries reached 274.7 billion US dollars, accounting for 83.58% of Latin America's total foreign debt.

When the principal and interest payments fell due at the beginning of 1983, Mexico's debt stood at a maximum of 43.1 billion US dollars, Brazil's at 30.8 billion, Argentina's at 18.4 billion, Venezuela's at 19.9 billion and Chile's at 8.6 billion.

The debt service ratios (i.e. the proportion of export earnings used to repay the principal and interest on foreign debt) of the five countries were 126%, 117%, 153%, 101% and 109% respectively.

All of these rates far exceed the internationally recognised warning line of 20%.