In the joint acquisition of British Energy by United Energy Group and EDF, as well as their acquisition of British Electricity Distribution, a subsidiary of EDF, United Energy will need to invest a total of £10 billion.
This funding will come from bank loans and financing.
The £5 billion required to acquire British Electricity Distribution came from a loan from Standard Chartered Bank, while the £5 billion required to acquire British Energy with EDF was financed by the British government's public funds, which purchased £5 billion of corporate bonds from United Energy. Following the announcement
of the British Energy acquisition, the share prices of both United Energy Group and EDF rose accordingly—a sign that the market was very optimistic about the acquisition.
In fact, United Energy Group's debt was already quite high, having not only completed a series of acquisitions but also embarked on a series of major projects, including refineries in Kolo, Huaxia, and India.
However, United Energy Group's debts primarily come from bank loans. Actually, using British pounds for these loans is a relatively cost-effective option. The pound is expected to continue to depreciate over the next few years, meaning that the profits from United Energy Group's overseas investments, when converted back into pounds, will benefit from a significant exchange rate differential.
Not only United Energy Group, but many of the companies controlled by Baron have also been expanding their overseas operations through pound loans.
After this, Baron left London for China.
This trip to China was quite high-profile. The Devonshire first landed at Yanjing Airport, where he would be met by a group of high-ranking officials.
This wasn't surprising, given Baron's current status, making him difficult to maintain a low profile in China.
His status as a British Duke not only brought him wealth, but also his influence in the global business world—just think of the treatment given to Bill Gates, Murdoch, and even later Apple CEO Tim Cook and Tesla CEO Elon Musk when they visited China.
Barron's power and wealth surpassed those of any of these individuals.
Of course, the reason he commanded such attention from the Chinese side wasn't just because relations between the two sides had strengthened significantly since Brown took office, but also because he wasn't coming empty-handed.
First, United Energy Group, in addition to partnering with CNPC on a large-scale refining and chemical project in Guangxi Province, will also partner with Sinopec on another oil refining and chemical project in Liaoning Province, which will involve an investment exceeding £2 billion.
Furthermore, Four Seasons Cavendish Hotel Group, O2 Telecom, and Gucci-Hermès Group will also expand their investments in China.
After meeting with the Chinese leaders, Barron headed directly to the Shenzhen Stock Exchange.
"It's a pleasure to meet you, Mr. Wang."
"I'm also particularly grateful to His Royal Highness the Duke for his optimism about our company. I hope our cooperation will be a success."
"I definitely will."
In the Shenzhen Stock Exchange, Barron met with BYD's CEO, Wang Chuanfu. Accompanied by Wang Chuanfu, Barron toured BYD's headquarters and its car and battery manufacturing plants.
Yes, before this, Finn Hudson, CEO of Global Industrial Investment Fund, had already come to the Shenzhen Stock Exchange and proposed to Wang Chuanfu to invest in BYD Company. It can be said that at this time, BYD had not yet achieved the unprecedented success it would later achieve in new energy vehicles. Although BYD already held a leading position in the global battery industry, Wang Chuanfu's unexpected announcement of its entry into the automotive industry was not widely understood.
Even to this day, BYD's automotive manufacturing ventures remain largely unsuccessful.
Baron, a world-renowned investor and the owner of the British Motor Group, a multi-billionaire automotive conglomerate with numerous renowned brands, was willing to invest in BYD, which certainly bolstered Wang Chuanfu's support.
However, this time, the investor in BYD was not Caesars, which owned British Motor Group, but Global Industrial Investment Fund—a significant factor, considering that Global Industrial Investment Fund's holdings in Honor Electronics were already major BYD customers.
According to the agreement, GII Fund would purchase a 10% stake in BYD at HK$8 (approximately US$1) per share, for a total investment of approximately US$230 million.
This investment made GII Fund a major shareholder in BYD.
Of course, Baron knew he wasn't the only one interested in BYD. In his previous life, Buffett was planning to invest in BYD in September of this year. However, this investment wasn't based on Buffett's bullishness, but rather on the strong recommendation of his partner, Charlie Munger.
Buffett's investment yielded a lucrative return: BYD shares, purchased at HK$8 per share, later appreciated to over HK$200.
But now, Baron had swooped in and snatched up this investment opportunity. With the GII Fund's investment, BYD no longer needed to accept further investment from Berkshire Hathaway.
After all, while Buffett's influence in the investment world was immense, Baron's was no less impressive at this point.
After leaving BYD, Baron also visited Honor Electronics' production facility near Shenzhen.
This facility is quite large, primarily assembling Dopod phones and some Honor Mate models.
Since the Mate 1S was launched before Christmas last year, global sales have exceeded 5 million units to date, a significant leap in sales compared to Honor Electronics' first smartphone, the Mate 1.
This is why Honor Electronics is continuously expanding its production base.
Furthermore, Honor Electronics is about to release the Mate 2, which will incorporate a greater proportion of domestically produced components. Therefore, in addition to Honor Electronics' production base, several upstream component manufacturers in which the company has invested have also concentrated their production facilities here.
Currently, these components are primarily used in the Dopod Smart 1, significantly reducing the cost of this phone and making it very competitive.
"We're still supporting our suppliers in touchscreen R&D. We're making good progress, and I believe we'll soon be able to use domestically produced touchscreens..."
the Honor Electronics representative explained to Barron.
"However, the quality will undoubtedly be somewhat inferior to that of Japanese and Korean touchscreens. Therefore, these touchscreens will initially be used on low-end Dopod phones. Honor phones, for example, will still need to source their touchscreens from manufacturers like Sharp and Samsung."
Touchscreens are crucial to smartphones and account for a significant portion of a phone's cost. Therefore, as Honor Electronics' sales have grown, they've been hoping for a stable supplier of touchscreens. After all, Samsung and LG, among their suppliers, are considered Honor Electronics' competitors in the mobile phone industry, so they need to plan ahead.