MTL - Reborn Capital Empire-v2 Chapter 719 E.ON Group
Chapter 719 E.ON Group
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Guo Shouyun is no stranger to E.ON Group, one of the four major integrated power groups in Germany, an integrated power company involving power generation, transmission, distribution and retail. Before the reform of the power industry in Germany, it was listed as the four major monopoly groups in the German power industry along with Baden-Württemberg Energy Company, Rheinland Energy Company and Great Falls Company.
"Eon Group, as one of the largest power groups in Germany, has an installed capacity of 43,500 megawatts, accounting for 26.5% of the total installed power capacity in Germany. Far more than with Baden-Württemberg, Rheinland and Great Falls. In addition, E.ON is one of the six largest power companies in the UK, and acquiring it will further strengthen our position in the UK power industry.”
"As for capital, although the market value of E.ON Group is 43.27 billion euros, the market value of the integrated power business is around 20 billion euros, excluding chemical, petroleum, trading, transportation and service industries. With our capital reserve of 21.25 billion U.S. dollars, Coupled with some bank credit, the acquisition of E.ON's power business is enough." Jonathan Weil said in his channel.
Guo Shouyun nodded. Compared with the Great Falls Company wholly-owned by the Swedish government and the Baden-Württemberg Energy controlled by the Baden-Württemberg government, 71.37% of which are coal-fired power plants Rhein Energy, E.ON Group is indeed more Suitable for the acquisition of Pacific Energy.
"Remember what I told you about Pacific Energy's development strategy in the US and Europe?"
"Increase the scale of natural gas power plants and new energy power plants, and expand the power transmission, distribution and sales network." Jonathan Weir nodded.
"As a developed country, Europe's infrastructure is much better than that of developing countries. But this also brings a serious problem. When new technologies start to be gradually applied, the elimination of backward production capacity will cause serious losses. Due to energy 71.23% coal-fired power plants, 23.16% nuclear power; E.ON Group 61.27% nuclear power, 26.14% coal-fired; Great Falls 88.94% lignite power plants; Except for Baden-Württemberg Energy, which owns 30.12% The remaining three companies, nuclear and coal-fired power plants, account for the vast majority of renewable energy plants, which means that if we acquire their power business, the huge loss of phasing out outdated capacity will fall on us.”
"So, the best power development policy for developed countries such as Europe, North America, Australia and New Zealand is to actively deploy power transmission, distribution and sales links, and to deploy renewable energy power plants. Taking advantage of major European power groups , when hesitant to invest in new energy, actively seize the market.... In the acquisition of Scottish Power, what I really value is not its 13 power plants with a total installed capacity of 7,000 megawatts, but its central and southern Scotland and northern Wales. , as well as the transmission, distribution and sales networks in Cheshire, Shropshire, Worcestershire, and Leicestershire in northern England, especially the 5.2 million electricity users. The UK has a total of 26 million households, and Scottish electricity accounts for five 1/1, that's what makes them most attractive."
"Boss, I admit that coal is indeed the goal of being phased out in Europe in the future, but nuclear energy is safe and efficient, and should not belong to the outdated production capacity being phased out." Jonathan Weldau.
"Since the Chernobyl incident in the Soviet Union, there has been a huge controversy over the construction of nuclear power plants in Europe, which has increased industry uncertainty. Moreover, the European nuclear energy industry belongs to the second generation. After 30 years of use, it needs to be Equipment renewal and maintenance, these all require huge investment.”
Guo Shouyun didn't say anything, that was the Fukushima incident in Japan in 2014. The leakage of the Fukushima nuclear power plant directly led to the German government's nuclear abandonment policy, and stipulated that all power generation companies in the country must phase out all nuclear power plants by 2022. At this time, taking over the E-On Group, it is necessary to pay for the dismantling of the nuclear power plant and the storage of nuclear waste of up to 16 billion euros in the future.
Jonathan Weir doesn't know what will happen in the future, but Guo Shouyun can't step into this giant pit by himself.
However, Guo Shouyun's explanation is obviously far-fetched, and there is no way to really convince Jonathan Weir. But he also explained more.
"I think British Grid is a better buy than E.ON. The Warwick-based company owns 7,200 kilometers of high-voltage overhead lines in England and Wales, 1,500 kilometers of underground cables, a power transmission system for 342 substations; and 7,660 kilometers of Natural gas high-pressure gas pipelines, 133,600 kilometers of natural gas distribution pipelines, and 10.6 million natural gas users in the UK."
“…In addition to UK assets, NGG operates more than 14,000 km of electricity transmission network, 116,600 km of distribution network; 781 km of natural gas pipelines, 56,300 km of natural gas distribution pipelines in the Northeast United States; The state and the northeastern region of Rhode Island provide electricity and natural gas, providing electricity to 3.3 million customers and natural gas to 3.4 million customers."
“…If we succeed in acquiring UK Grid, Pacific Energy will have three-quarters of the UK’s high-voltage transmission network, one-sixth of the distribution network, and one-fifth of customers; one-half gas transmission network, three-fifths of the gas distribution network, and one-half of the users. We will be the largest utility company in the UK. And it will greatly enrich our business in the northeastern states of the United States.”
"...NGG's assets totaled £21.74 billion, market value was £11.2 billion, and liabilities accounted for 42.34%. The amount of funds we raised is sufficient to acquire all the assets of the British Grid Corporation."
After pondering for a moment, Jonathan Weir said, "If we initiate the acquisition of the British grid company, I am afraid that we will encounter an investigation from the British antitrust department."
"Even if we acquire the British grid company, it is far from being a monopoly. In addition, we can promise that if we acquire the British grid company, we can invest 10 billion pounds in the next 10 years, enter the field of new energy power generation, and effectively improve the UK electricity supply structure.”
"Boss, the cost of new energy power plants is too high, the profits are meager, and the technology is far from mature. Is it too early to enter?"
"That's really something we should be concerned about. But, Jonathan, do you know why I'm reluctant to take Pacific Energy public?"
"Pressure from Wall Street investors?"
"That's right!" Guo Shouyun nodded, "The cash flow of public utilities is very rich and the return is stable, but the return on equity is very low, and it is not bad to maintain 7%. And it is very easy to be affected by policies. The investment in business projects has a large proportion and a long payback period, so it is naturally not liked by those Wall Street investment bankers who are chasing short-term interests. Therefore, I would rather invest my own money to develop Pacific Energy Group than give the company shares to those people. Only the speculative Wall Street **** are left. Otherwise, under the control of capital, Pacific Energy Group, which starts chasing short-term revenue, will not end up much better than Enron.”
In the history of American business, there are too many listed companies, in order to create a beautiful balance sheet to please Wall Street and investors, they gave up their stable business strategies and long-term corporate goals, and eventually collapsed. Nearby are Enron, WorldCom and Consecco, and farther are Chrysler and Texaco. However, the latter two were more fortunate than the former, and did not completely collapse at the time.
“…For Pacific Energy, the best way to invest is to focus on the long-term development of the group. Obviously, with the increasing global attention to environmental issues, fossil energy is being phased out. If natural gas is used for power generation, it is also because If it exists as a clean energy source and exists as a rich energy mix, then coal will be slowly phased out. Nuclear energy is also slowed down by accidents and external threats.”
"...It is foreseeable that in the future, with the continuous subsidies of various countries for green energy, the real need to improve the environment, and the advancement of technology, new energy power plants will become the main force in the power supply of major countries in the world in the future. We invest now, it is equal to Occupy the market ahead of time. In addition, the energy pattern of developed countries such as Europe and North America has basically been solidified after hundreds of years of development. Expansion through acquisitions will not only cost a huge amount of money, but also face the review of government agencies, and undertake old power plants. equipment maintenance and updates.”
“…But if we enter the market with investment in new energy power plants, the government of the host country will become our helper. Moreover, most European countries have implemented market-oriented power policies. Even Rheinland Energy, Baden-Württemberg Energy, etc. The vertically-integrated power operators in China must also open up their transmission and distribution networks to us. In addition, if we use new energy as a selling point~www.novelbuddy.com~ can also attract more power users.”
“…compared to the benefits that can be obtained in the future. The current difficulties do not constitute a reason for us to hesitate to enter the new energy field. Although the profit of new energy power plants is very small, it is not completely unprofitable. Invest now, take the lead The developer advantage will help us make more profits in the future.”
Jonathan Wells nodded after a moment.
"When I go back, I will hold a management meeting to discuss the boss's point of view and formulate a corresponding investment plan."
"Jonathan, what I admire most is your resolute attitude. But before the specific new energy investment plan comes out, you must first do a good job of the employee equity incentive plan and the employee equity incentive plan. Otherwise, we will have no money to buy the UK. Grid Corporation."
"Yes! ... Employee equity incentive plan, how many shares are you going to set?"
"Tentatively set 15%! But this requires a long-term plan, rather than setting up an option pool with 15% of the shares in advance."
Guo Shouyun still needs this part of equity financing to invest in the future, especially the subprime mortgage crisis three years later, and of course he will not give up his equity early.
As for the employee equity incentive plan, this is the same as the listing. The funds raised expand the business of Pacific Energy, which is equivalent to a disguised increase in the value of the remaining shares in his hands. This is completely different from the equity award plan, which distributes shares to outstanding employees without asking for return.
Jonathan Weir nodded, as he expected. Guo Shouyun will guarantee his absolute controlling stake in Pacific Energy Group.
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