The British government's acceptance of Standard Chartered's acquisition of Northern Rock Bank also indicates that Chancellor of the Exchequer Darling has accepted Barron's proposal.
They will allocate £50 billion from the Bank of England and related government-managed funds, of which £25 billion will be placed in a custodial account established by the DS Group and overseen by the Treasury and the Financial Services Authority. This account will be managed by the newly established British Fortune Time Fund (BFT).
According to a confidential agreement signed between the DS Group and the British government, the assets held by DS Holdings (the Cavendish Trust) will be used as collateral. Within three years, the DS Group will return £50 billion plus interest from the fund to the relevant banks and institutions. If the funds in the BFT account are insufficient to cover the amount, the funds will be supplemented by the sale of shares held by the Cavendish Trust.
Of the £50 billion, another £25 billion was used to purchase Standard Chartered Bank convertible bonds on behalf of the Cavendish Trust. Standard Chartered then used its own funds to finance the £500 million purchase of Northern Rock Bank shares for the privatization (in reality, DS Group had already acquired some Northern Rock shares at a low price, and these shares would be exchanged for some newly issued Standard Chartered shares). In addition to the £25 billion in interest, the remaining £25 billion in proceeds from the sale of convertible bonds to the Cavendish Trust were returned to the Bank of England.
In the future, when appropriate, the Cavendish Trust will exercise its right to convert the £25 billion in Standard Chartered Bank convertible bonds into its own shares.
Following the acquisition of Northern Rock, the Northern Rock name will cease to exist.
Standard Chartered will restructure Northern Rock Bank, integrating its operations into Standard Chartered's own. This will significantly increase their presence in the UK. Previously, Standard Chartered's primary focus was on emerging markets in Asia, Africa, and South America. Its presence in the UK was minimal, and without its headquarters in London, it could hardly be called a British bank.
As for Northern Rock Bank's previous management, it was completely purged, with new managers appointed from Standard Chartered. Standard Chartered's UK branch will adopt a more conservative approach, moving away from the aggressive nature of Northern Rock. Their immediate priority is streamlining Northern Rock Bank's operations and getting it back on track. Meanwhile
,
after celebrating his 28th birthday, Barron and the Earl of Bute traveled to America together.
Earlier, after Countess Chris gave birth to Barron's second child, he had promised to take her on a trip.
It was at this time that Earl Bute was going to visit his sister, Jenny Bute.
"Isn't John coming?"
Earl Bute asked after seeing his sister Jenny.
Hearing her brother's question, Jenny Booth withdrew her gaze from Barron. She picked up little Daniel, who was less than three months old, and said to her brother in a bad mood:
"Him? Ever since he became the chairman of the Sinclair Group, he has been busy every day. I'm too bored over there. It's better to come to New York to relax."
Hearing his sister's complaint, Ian Booth shrugged and said:
"You have been married for so long, you can have a child first, so that you won't be so bored..."
He looked around at his children:
"With children, the home will be much warmer."
"Wow, Ian, your tone of voice is becoming more and more like dad, just like an old antique."
She didn't give her brother any face at all, and took Chris's hand and said:
"Women are not just tools for giving birth. Dear Chris, how about we go out shopping together? By the way, Barron, didn't you say you were going out for a while? It's just a good opportunity to take us with you..." Barron had no intention of intervening in their conversation, but upon hearing Jenny's words, he glanced at Bonnie and said,
"You two should go relax together. I'm on my way."
He was planning to visit DS Group's New York branch, where he had an appointment with Goldman Sachs CEO Lloyd.
While the subprime mortgage crisis had inflicted heavy losses on all five of Wall Street's largest investment banks, Goldman Sachs suffered the least.
This was due to Goldman Sachs's heritage of flexibility and adaptability.
Seeing the situation turn dire, they immediately switched sides, not only selling their CDO bonds immediately but also decisively withdrawing from their bet with the Black Swan Fund and conceding the defeat.
Next, they switched to short selling, seemingly able to not only offset their previous losses but also make a small profit.
Morgan Stanley faced a similar situation as Goldman Sachs, having also acted promptly. While they suffered losses, they were minimal compared to the other three investment banks.
"Your Highness, you should be aware that this subprime mortgage crisis has caused us considerable losses. The third-quarter revenue we reported earlier showed a decline compared to last year. We need a strong fourth-quarter report..."
Lloyd cut to the chase, stating his goal directly. He hoped that the Zeuss Fund, a joint venture between the two parties, would distribute dividends in the fourth quarter. This would ensure that, with the increased dividend income, Goldman Sachs' overall fourth-quarter earnings would be significantly better.
Initially, DS Group and Goldman Sachs jointly established Zeuss Investments in a 6:4 ratio. The Zeuss Fund, within this partnership, specializes in high-frequency trading in the US market.
Following the fund's outstanding performance and impressive returns, both parties subsequently increased their investment, and the total size of the Zeuss Fund has now exceeded $3.5 billion!
Lloyd hoped to distribute $2.5 billion of the proceeds as dividends. Since October, the US stock market had been declining, which he believed would impact the Zeuss Fund's returns. He believed a temporary dividend distribution would help Goldman Sachs achieve strong financial results in the fourth quarter of this year, boosting its stock price.
Baron naturally understood that Lloyd's desire for Goldman Sachs's strong performance was one factor, but his personal income, which comprised a significant portion of his dividends and equity incentives, was tied to Goldman Sachs' performance. Given the current circumstances, he naturally hoped to find ways to boost overall performance.
"That's no problem. If Goldman Sachs needs the proceeds, the Zeuss Fund can distribute your portion as dividends. However, as for DS Group, we don't have a better investment target yet, so we'll keep it in the Zeuss Fund..."
Barron's words surprised Lloyd. He also knew that if that were the case, DS Group's investment in the Zeuss Fund would be far higher than Goldman Sachs'.
But after a moment's deliberation, he nodded.
"Let's do it."