An hour later, when Li Yi stepped out of Citibank, the $8 billion loan agreement had already been signed.
Although it would take a few days for the funds to clear, the contract had been signed, so Li Yi wasn’t worried they’d back out—after all, the penalty for breach of contract was substantial.
After leaving the bank, Sandy looked at Li Yi and asked, “Boss, where do we go now?”
“Take me to the Royal Bank—I want to close a big deal with their head!” Li Yi said.
Sandy was taken aback for a moment, then said, “Boss, you’re not planning to use the remaining company shares as collateral for a loan, are you?”
“It is a loan, but the collateral isn’t the company shares!” Li Yi said.
Sandy wasn’t one to pry, so when Li Yi said he wouldn’t be mortgaging any more of the company’s shares, he didn’t press the matter further.
Then, he took Li Yi straight to the Royal Bank!
Royal Bank ranks first in corporate, personal, and overseas banking across the British Isles, and second in retail banking and private auto insurance—it’s definitely a superbank!
Thanks to Sandy’s—and the Henry family’s—enormous influence here, Li Yi had no trouble securing a meeting with the bank’s head.
An hour later, when Li Yi and Sandy emerged from RBC’s headquarters, Li Yi was holding a new agreement in his hands.
According to the terms of this agreement, the $8 billion he had borrowed from Citibank would be fully converted into British pounds and deposited into the Royal Bank.
At the same time, using the deposit certificate for this sum as collateral, Li Yi secured a loan of 60 billion Hong Kong dollars from the Royal Bank.
After all that back-and-forth shuffling, Li Yi and Sandy strode out of the Royal Bank, under the bewildered stares of the bank’s senior executives.
Back in the car, Sandy looked at Li Yi and said, “Boss, do you… do you think the pound is going to appreciate?”
“You figured it out?”
“Yeah. You borrowed US dollars from Citibank but converted them into pounds to deposit—clearly the pound is going to appreciate. It’s just…”
“But what?” Li Yi asked with a smile.
“It’s just that what you’re doing is too risky. Right now, you’ve taken out two loans with the same pool of funds, so you’ll have to pay interest twice. The cost of capital will reach 12.5%. If the pound doesn’t appreciate significantly by then, we’re going to lose a lot of money!” Sandy said with concern.
Li Yi’s lips curled slightly upward, and he replied, “Just for using the word ‘we’ just now, I’ll share some news with you!”
“What news?”
“The government is going to adjust the pound-to-dollar exchange rate very soon, significantly boosting the value of the pound—by at least 50%!” Li Yi said.
Sandy was completely stunned by Li Yi’s words. It took him a while to respond: “Boss, that’s impossible. Given the Empire’s current economic situation, it’s already a miracle the pound is holding its current exchange rate. How could it possibly appreciate—and by such a huge margin?”
Li Yi smiled and said, “I won’t go into the specifics with you. Just pass this information on to your father—I’m sure he’ll know what to do!”
Hearing this, Sandy fell silent.
He wanted to press further, but then he recalled the news he’d just received that afternoon: the plane had made a successful emergency landing on the island, with no fatalities.
At the same time, the cause of the crash had been determined—it was volcanic ash.
Reportedly, a volcano had just erupted along the plane’s flight path, sending volcanic ash drifting as high as 13,000 meters. As the plane passed through the ash cloud, prolonged friction between the ash and the fuselage eventually caused electrical discharges.
Even more alarming was that the plane’s engines had sucked in volcanic ash, causing internal temperatures to spike.
Furthermore, volcanic ash seeped into the fuel tanks, eventually causing a blockage in the fuel lines. This resulted in the engines losing power and stalling, which ultimately led to the air disaster.
There was no human sabotage, no mechanical failure, and naturally, no human manipulation involved.
Yet this mysterious Eastern businessman had accurately predicted the approximate timing, course, and outcome of the disaster—a fact that was enough to shatter Sandy’s worldview.
With that thought, he decided not to press the matter further, but instead began to wonder if he should team up with Li Yi on this venture!
Seeing Sandy deep in thought, Li Yi smiled and then had the driver start the car!
The appreciation of the pound was an undeniable fact, and he knew the reason behind it—it was directly linked to the Falklands War.
Even before the war broke out, the British Empire’s finances were in dire straits. Signs of an economic crisis—such as inflation and rising unemployment—had begun to emerge, and the shadow of the Great Depression once again loomed over the nation.
Although the war temporarily diverted public attention, the funds it consumed dealt a further heavy blow to the national treasury.
To alleviate the increasingly severe fiscal and social problems, the government decided to implement economic reforms, the most significant of which was a decree to sell state-owned enterprises to private companies.
Although this reform had significant drawbacks, it did alleviate the government’s fiscal problems to some extent, giving this great power—which had been in decline for decades—a chance to catch its breath and recover.
Another major measure of the economic reform was the devaluation of the pound; the exchange rate against the dollar fell from 2.45 in 1980 to 1.54. This not only facilitated the import of goods from abroad but also indirectly helped control inflation.
Under the impetus of this series of policies, the British economy—which had been in continuous decline for many years—miraculously recovered.
By 1988, its gross national product had reached $384.778 billion, the inflation rate had dropped from 18.1% in 1978 to 4.4%, the number of unemployed had fallen below 2 million, labor productivity was growing at an average annual rate of 5.5%, and the annual growth rate of per capita income was approximately 3%—creating an economic miracle that astonished even the Iron Lady herself.
It was precisely for this reason that Li Yi, despite having made money in the futures market, did not immediately cash out and exit. Instead, he went all in, pouring the majority of his funds into Sheffield Company and spot steel.
It wasn’t that Li Yi was unaware of the risks involved; rather, he knew full well that it wouldn’t be long before the Iron Lady at 10 Downing Street would take steps to revive the sluggish economy.
At that time, a large number of high-quality state-owned enterprises would be sold to private investors, and the value of the pound would rise sharply.
If he could acquire a batch of high-quality enterprises at that moment, it would be a massive windfall.
So, his initial plan was to use his shares in Sheffield Company as collateral to secure a loan for acquiring those high-quality enterprises.
Whether he ran them himself or sold them after the economy fully recovered, the profits could be several times, or even more than ten times, the original investment.
But he never expected those bastards to act so unscrupulously and raid his home on Hong Kong Island. Consequently, he had no choice but to adjust his strategy and borrow some Hong Kong dollars to tide him over for the time being.
After maneuvering, he now had 60 billion Hong Kong dollars plus 400 million pounds in emergency funds, while also having 5.2 billion pounds pledged as collateral at the bank.
Once the pound appreciated, even if he didn’t invest those 5.2 billion pounds and simply exchanged them for US dollars, they would be worth over 12.74 billion.
The net profit from this transaction would be 4.7 billion US dollars—making the mere 12.5% cost of capital a drop in the bucket.
Now, Li Yi has everything in place; he’s just waiting for the funds to arrive.
As soon as the funds arrive, he can storm back to Hong Kong Island and face off against those foreigners in a showdown.
What Li Yi doesn’t know, however, is that the entire Hong Kong stock market is in a state of panic due to the arrival of these foreigners.
Especially among the Chinese Chamber of Commerce, it felt as if a catastrophe were looming, and morale was beginning to waver…
……….