wavenovel Chapter 957: The Deal is Made
Chapter 957: The Deal is Made
September 2008 was the darkest month for most American bankers.
Since Lehman Brothers declared bankruptcy on September 15, many small and medium-sized banks have also declared bankruptcy due to liquidity shortages caused by holding large amounts of subprime mortgages.
Among these, Wellington Mutual Bank also declared bankruptcy this month. Under federal law, the bank was taken over by the FDIC (Federal Deposit Insurance Corporation) after its collapse.
FDIC is in a real bind lately, taking over one bankrupt bank after another. They're desperately hoping a few white knights will appear to rescue them.
Inside a building in Midtown Manhattan, New York, Zhang Sui was looking at several large screens in front of her when her secretary, Emilia, knocked and entered, reminding her: "Boss! Everyone's here."
Zhang Sui stood up and straightened her clothes: "Let's go!"
Emilia quickly opened the door, and Zhang Sui went out and walked towards the conference room.
The long conference table in the meeting room was already full of people. These were former investment bank CEOs, former regulatory officials, legal teams, and accounting teams. This was an elite team that Zhang Sui had arranged in advance, with connections and expertise.
After Zhang Sui sat down, she nodded and said, "Let's begin!"
The meeting officially began, with Chloe Kennedy, the former FDIC executive in charge of hosting the meeting, manipulating the mouse.
The Wellington Mutual Bank logo appeared on the projected screen.
Wellington Mutual is the largest savings bank in the United States, with retail branches throughout the country and deposits exceeding $300 billion.
At this point, the silver-haired woman looked at all the attendees and continued, "As you all know, due to the large number of subprime mortgages issued by this bank, the bad debt ratio remained high, and the bank suffered the most severe bank run in its history."
Chloe Kennedy then said, "That's precisely why we're interested in it; in other words, it's part of our efforts to stabilize the situation."
After hearing this, Zhang Sui didn't rush to give an answer. Instead, she asked her finance director, "How much funding can we currently access?"
The CFO, whose name was called upon, replied without hesitation: "We currently have very ample cash flow, but my suggestion is to use no more than $20 billion to take over Wellington Mutual."
Upon hearing this enormous number, the atmosphere in the entire conference room momentarily froze.
Shortly after, Zhang Sui's voice broke the silence: "Very good, keep this cash on hand at all times to ensure it's always available."
The CFO replied, "Boss! Rest assured, this money is readily available."
The next day, Zhang Sui visited the executives of FDIC. They had already established a good relationship with Zhang Sui, and now that Zhang Sui was appearing as a white knight, she naturally became a guest of honor at FDIC.
Zhang Sui agreed without hesitation: "No problem, we have already made corresponding contingency plans, and apart from senior executives, we will retain all other bank employees."
Cameron glanced at Zhang Sui and then stated his other condition: "The Wellington Mutual Bank headquarters must not be relocated. This is to avoid unnecessary trouble; I think you understand what I mean?"
Zhang Sui replied affirmatively, "We have no intention of relocating the Wellington Mutual Bank headquarters, and we believe that the headquarters does not need to be relocated."
Zhang Sui's words reassured Cameron.
He then explained the next steps to Zhang Sui.
"Once the auction process begins, you will have 72 hours. Remember these three most important points: First, all bids must be in cash to avoid financing uncertainties. Second, you must reach an agreement with the Wellington Mutual Bank union beforehand. Third, you must issue a public notice informing depositors that their assets are protected by law."
Zhang Sui nodded without hesitation and promised, "We have no problem with any of that."
After leaving FDIC and returning to her office, Zhang Sui immediately convened a team meeting. After two days and two nights of hard work, all contingency plans were finalized.
The takeover announcement of Wellington Mutual Bank was officially released to the public in the early hours of September 26. Behind this announcement was a tender document for the acquisition of Wellington Mutual Bank that was more than a thousand pages long. This tender document was the result of several months of hard work by Zhang Sui's team.
According to the law, the announcement has been issued and the tender documents have been submitted; the next step is negotiation.
After several rounds of negotiations, Zhang Sui attended the final round of talks in a conference room at the Hilton King Hotel in Manhattan.
The FDIC officials present looked very serious.
"Ms. Zhang, if I may be frank, your offer is not the highest."
Zhang Sui remained calm and composed, replying, "However, we can promise to stabilize the current situation immediately, and we will inject the relevant capital within 12 hours. We will not ask the FDIC or the federal government to share the loan losses. Furthermore, according to our plan, we will retain more than 90% of our branches and employees. Most importantly, we have made a written commitment not to sell any core assets within three years."
Zhang Sui then looked down at everyone present, because she had the right to do so; controlling hundreds of billions of dollars in cash flow, she was now the white knight of the American financial world.
"Our purpose in acquiring Wellington Mutual Bank was to prevent the situation from deteriorating further, so to be precise, this is not a transaction, but a solution we have proposed based on the current situation."
Zhang Sui's words silenced everyone present.
As is customary, the representatives of FDIC rose and left the room to discuss the matter.
Zhang Sui wasn't worried about the outcome of the discussion at all, so she was the calmest person there.
She also has two other contingency plans: directly acquiring other small and medium-sized banks, since the United States has no shortage of bankrupt and failed banks these days.
About an hour later, the representatives from FDIC returned to the scene.
"Congratulations, beautiful lady. I hope Wellington can regain its former glory under your leadership." The chief negotiator of FDIC extended his hand to Zhang Sui with a broad smile.
"Thank you!" Zhang Sui smiled and shook hands with him.
Subsequently, FDIC officials announced: "Wellington Mutual Bank closed a deal worth $1284 billion."
Inside the meeting room, cheers erupted as Zhang Sui calmly shook hands with all parties to express her gratitude.