Chen Cheng’s suggestion seems to have once again taken Guo Huaian by surprise, "What chanism?"
"Based on the past trends in niobium ore prices, combined with market predictions from professional institutions, we set a price volatility range.
Within this range, we execute according to the predetermined profit sharing ratio. Once the price exceeds this range, whether rising or falling, both parties jointly bear the resulting changes in revenue or loss."
Guo Huaian rubbed his chin, "Mr. Chen, this seems feasible, but how can we accurately determine this price volatility range? If it’s set too narrow, it might frequently trigger adjustnts, increasing operating costs and uncertainty; if too broad, it fails to effectively share risks."
Chen Cheng smiled slightly, "You have the purchase price at China Tungsten New High Tech, right?"
"This..."
"We’ll use it as a reference."
Guo Huaian thought for a mont before instructing his assistant to open the computer and pull up the data.
"Bring up the niobium ore prices from the past five years," Chen Cheng narrowed the scope.
Once the data was ready, Chen Cheng pointed to the computer screen and said, "I initially think that using the current market price as a benchmark, a 15% up-and-down fluctuation range is quite suitable. This range can broadly cover normal market volatility and won’t trigger adjustnts too frequently."
"Mr. Chen, from the data, this range has certain rationality. But we need to clarify how exactly the profit-sharing adjustnt works when the price exceeds this range," Guo Huaian asked again.
"If the price rises more than 15%, the excess profit will be shared between Xingye Enterprises and China Tungsten New High Tech in a 7:3 ratio, as the niobium ore resources provided by Xingye Enterprises are the key factor in the price increase;
Conversely, if the price falls more than 15%, China Tungsten New High Tech can take a slightly larger share in profit distribution to compensate for the revenue reduction caused by the price drop, for instance, according to a 6:4 division."
After Chen Cheng finished, he looked at both of them, "What do you think?"
"I have no objections," i Xiang naturally trusted Chen Cheng.
Guo Huaian took a sip of tea, "Mr. Chen, personally, I think there’s no issue with what you said. But, there’s one more problem."
"Please, go ahead."
"If we spread the transfer fee evenly across each stage, it seems to alleviate financial pressure, but the ti value of money cannot be ignored."
Guo Huaian continued, "Whether settled in RMB or USD, the value of this substantial fund varies at different tis. If paid in stages, it’s akin to us bearing additional financial costs."
Chen Cheng smiled slightly, his goal finally articulated through Guo Huaian.
"How about this, Director Guo? I understand your concerns, we can actually discuss how the 47 billion will be raised." Chen Cheng spoke slowly, "For example, you could partner with so financial institutions for loans and financing, I believe with the potential and prospects of this niobium ore, institutions would be willing to participate."
Guo Huaian shook his head with a wry smile, "Mr. Chen might not know, the recent market volatility has made financial institutions increasingly stringent in loan approvals for mining projects. Moreover, financing would dilute the interests of existing shareholders, which we need to consider carefully."
At this mont, i Xiang interjected: "Director Guo, I understand the financial pressure faced by China Tungsten New High Tech.
But from Xingye Enterprises’ perspective, we also need to ensure that the value of niobium ore resources is fully realized. If an agreeable plan on fund paynt and profit-sharing ratio cannot be reached by both parties, the collaboration might not be easy to advance."
Guo Huaian couldn’t make up his mind.
The Brazil Niobium Mine is a sought-after asset, but to acquire it, money must be paid.
Chen Cheng’s installnt plan seed fair, but actually provided no advantage to China Tungsten New High Tech, as not only did they have to share profits, but also pay the transfer fee, which was definitely not cost-effective.
"Well, Director Guo."
Chen Cheng saw that the timing was about right, "I do have a Plan B here."
"Mr. Chen, please tell."
"The 47 billion, Dili Private Equity will lend it at a low-interest rate to China Tungsten New High Tech."
Chen Cheng began, "The interest rate will follow the bank’s lowest preferential loan rate of the period, with a term of ten years, only interest repaynt for the first three years, from the fourth year onward, annual equal repaynt of principal and interest."
Though Guo Huaian was montarily delighted, he quickly felt downhearted.
"Mr. Chen, this plan is indeed enticing, greatly alleviating our cash flow issue. However, introducing private equity lending involves nurous complex legal and financial terms, which is challenging to handle."
Chen Cheng smiled faintly, "It’s quite simple."
"Simple?"
"We can establish an industrial fund, where Xingye Enterprises uses niobium ore resources valued at 47 billion for shares, China Tungsten New High Tech uses technology and managent valued at 10 billion for shares, and Dili provides funds."
Chen Cheng elaborated carefully, "The money cos from the industrial fund, China Tungsten New High Tech receives a 47 billion low-interest loan from the fund to pay the mining rights transfer fee to Xingye Enterprises."
After listening to Chen Cheng’s plan, Guo Huaian’s eyes lit up.
This plan not only solves the financial dilemma for China Tungsten New High Tech but also allows for one-ti paynt of the transfer fee, and with low interest, it’s entirely a good deal.
"Mr. Chen, I heard from Mr. Zhang a long ti ago that you have a very agile mind, always coming up with ideas, and now upon eting, it turns out to be true!"
Chen Cheng waved his hand, "But, I have one condition."
"Cond...ition?" Guo Huaian’s smile froze, "Isn’t there interest already?"
"Director Guo, you don’t need to be nervous."
Chen Cheng smiled and said, "My condition is very simple, which is that for the imported niobium ore, I should have priority in purchasing."
He crossed his legs, "Of course, I won’t shortchange you on the price, we’ll go by market price."
"The only thing is to supply my required quantity on a priority basis," Chen Cheng emphasized again.
Guo Huaian swallowed, the condition put forth by Chen Cheng was indeed simple; after all, once the ore is mined, it needs to be sold; selling it to soone is still selling.
"Mr. Chen, I definitely agree with your condition."
Guo Huaian readily agreed, "However, what exactly is the priority purchase quantity?"
"I currently don’t have the data to support a specific number," Chen Cheng said truthfully, "I’m just setting the rules here. I trust your technology can et the production capacity I need."
"No problem!" Guo Huaian readily agreed, "Let’s do it!"
"Also, the signing ceremony with Xingye Enterprises must be grand," Chen Cheng reminded again, "Invite more dia to amplify the exposure."
"Rest assured, Mr. Chen, I will definitely implent this matter."
Chen Cheng chuckled, "Director Guo is indeed a straightforward person."
"Hahaha."
"Then let’s wish for a pleasant collaboration!"
"Pleasant collaboration!"
The two shook hands and talked for a while longer.
i Xiang listened on the side, knowing that the man beside her had once again helped her, unintentionally revealing a gentle smile on her face.
And the troubleso matter at hand had finally been addressed by Chen Cheng in such a manner, transforming into a coveted asset for others.
Thinking of this, i Xiang breathed a sigh of relief, feeling deeply moved.
"Go outside and have them bring the nu in," Chen Cheng said to i Xiang, then turned to Guo Huaian, "Director Guo, would you like to stay for a casual dinner tonight? Taste the culinary skills at my little establishnt, how about it?"
"Mr. Chen is too modest," Guo Huaian laughed in response, "What little establishnt is this? We’ve discussed deals worth hundreds of billions right here."
"Indeed, countless deals have been talked about on this table,"
Chen Cheng conversed in a relaxed manner, "But a deal this size, it’s the first ti."
He was also making final preparations before going to Harbin, "How about we sign a letter of intent tomorrow and spread the news, let everyone hear it, how about it?"
"Sure, Mr. Chen."
Guo Huaian was eager to settle things early; once the contract is signed, it also ans China Tungsten New High Tech has its first overseas niobium ore resources, which is positive for them.
"Tomorrow afternoon then! I’ll have my people prepare right away!" he said enthusiastically.
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