Becoming a Russian Oligarch After Rebirth
Chapter 1479 - 1139: Doing It Reluctantly_2

Chapter 1479: Chapter 1139: Doing It Reluctantly_2

If Li Fuzhen’s performance was really poor, the board of directors wouldn’t mind replacing her with a new chairperson or simply sidelining her altogether!

Faced with the deliberate difficulties from the directors, Li Fuzhen was confident in her approach, and within a few days, she came up with a fundraising proposal, even having contacted two investment institutions, ready to privately place new shares amounting to twenty billion US dollars!

These two investment institutions were the Russian Industrial Fund and Crimea Investment Company, both capital from Eastern Europe!

The twenty billion dollars’ worth of shares in Samsung Group targeted for private placement were all taken by these two institutions, but as a condition of investment, they also required Samsung Group to invest in building a large-scale electronics factory, or rather a large-scale production base in Russia, for the production of mobile phones, laptops, monitors, etc.

Such a factory would provide a significant number of job opportunities and tax revenue. It belongs to the high-tech industry and would not cause much pollution to the locality, making it a relatively popular investment.

When people put in money, of course they can lay down conditions. Moreover, Li Fuzhen’s original plan was to expand investments abroad, and Europe was one of the most important markets. Don’t forget that Europe’s GDP total ranks first worldwide!

The entire Europe, especially the countries in Western Europe, are quite wealthy, and their market is full of temptations for Samsung.

However, if one were to set up production bases in Western Europe, such as France, the UK, Germany, etc., while it might be convenient, the costs would be sky-high! Labor, raw materials, environmental protection requirements are all extremely high there, which directly leads to non-reducible production costs.

Therefore, choosing to produce in Eastern Europe and then selling across the whole of Europe is a rational plan.

Eastern Europe, especially Russia, has high-quality workers with reasonable wage demands, a solid industrial base, and is a major energy power. Resources such as hydroelectricity and metals are much cheaper than in other countries!

It’s also very close to the developed areas of Europe, so transportation costs are not high...

Over the past few years, Russia’s economic development has been extremely fast, and by drawing on neighboring brother countries, the "Eastern European Union" has been established. Within the entire union region, goods are exempted from tariffs, meaning that electronics like mobile phones and laptops produced in Russia can be sold directly to neighboring countries with zero tariffs...

Oh, and, Russia has just rolled out policies to promote consumption and industrial upgrading, subsidizing nationwide to encourage ordinary citizens to buy computers and mobile phones.

Putting all these conditions together, honestly, even if the Industrial Fund and Crimea Investment hadn’t offered to invest twenty billion dollars, Li Fuzhen would still choose to set up a factory here!

...

After Li Fuzhen presented the investment intentions and cooperation plans to the company board of directors, those directors clearly couldn’t find any reason to object, as this was also a boon for the expansion of the Group’s business!

After all, the money invested in setting up the factory was not coming from the Group but was being paid for by others, so no matter whether the results were as expected or not, the Group would profit at no loss!

Thus, this targeted share issue was smoothly passed, with the Russian Industrial Fund and Crimea Investment Company jointly contributing twenty billion dollars and acquiring 15% of Samsung Group’s shares!

This private placement valued Samsung’s shares based on market price, with no premium given nor any discount.

After all, Samsung, as an established giant, nearly peaked in its market value, without much room for speculation, so it couldn’t compare with those emerging internet giants.

Honestly speaking, if it weren’t for the Industrial Fund and Crimea Investment’s willingness to take part, Li Fuzhen’s private placement would have failed to garner interest from any other investment institution!

Even the original shareholders of Samsung were not willing to fork out so much money...

Of course, all of this was with Wang Ye’s approval.

He wasn’t thinking about making a big profit through his stake in Samsung because he was well aware that this investment wasn’t all that profitable.

In 2009, there were far too many companies more worthy of investment than Samsung, especially within the internet industry.

Investing in these emerging Internet Companies now could lead to returns tens or hundreds of times greater in a few years after the company goes public!

As for Samsung, according to Wang Ye’s somewhat vague memory, its highest market value seemed to be just about 300 billion US dollars, not much more than the current 110 billion or so...

However, his investment in Samsung this time had a different purpose.

The Samsung brand does indeed wield significant influence in the consumer electronics field; its business is too diverse and broad, covering almost everything, and it is almost always top-notch!

Especially during the early 2000s, Samsung’s mobile phones could compete with Nokia, and they manufactured products like laptops, digital cameras, monitors, TVs, fridges, and washing machines...

In short, as far as you can think of electrical appliances, it seemed there was nothing they didn’t make!

Wang Ye had plenty of money on hand, but turning these funds into a boost for the national economy was more challenging.

The same 20 billion US dollars in Wang Ye’s hands could only be used for major infrastructure projects, such as building a few expressways and the like, which is another matter altogether, although in the long run, it is beneficial for national development.

But it’s undeniable that such investment is hard to show quick results.

However, spending it through Samsung would transform it into a giant production base, bringing multiple advanced electronics factories to Russia, capable of producing the most advanced and cutting-edge electronic consumer goods, and also bringing tens of thousands of high-income job opportunities on site. After starting production, it would bring huge tax revenues and export trade values...

It could even drive the development of many upstream and downstream industries, such as chip wafers, metal smelting, packaging and printing, etc...

It’s the same principle as with the automobile industry; you cannot only look at how much GDP this one industry contributes, but also at its ability to drive the upstream and downstream industries!

The 20 billion US dollars spent today could, in five to ten years, potentially bring in 200 billion or even 2 trillion US dollars in revenue for Russia through the production bases established by Samsung!

Of course, through this investment, Wang Ye also managed to make two of his investment funds major shareholders of Samsung and helped support Lee Fuzhen, who had just taken office as the company’s president, in the board of directors...

So no matter how you look at it, this money was very well spent...

Moreover, Wang Ye’s investment wasn’t only for helping Lee Fuzhen; he was also striving to promote the development of Russia’s own light industry.

As everyone knows, Russia has a fairly good industrial base in heavy industry, but almost no light industry, because all of it was divided among the other ’siblings’ when they ’split the family’!

If those sibling countries could develop their light industries, now that everyone is an Eastern European Union member and there are duty-free transactions between them, then Wang Ye wouldn’t have to worry anymore.

But almost twenty years have passed, and now, with Wang Ye’s strong support, Russia’s heavy industry has developed quite well, but the light industries of the neighboring sibling countries have already fallen into disuse!

They are even worse-off than Russia; at least Russia has several large wholesale free markets established by Wang Ye’s New Sun Group. Since they couldn’t produce the goods themselves, it made sense to import them, so there was a large influx of inexpensive goods from Asia to choose from.

And some surrounding smaller and poorer countries don’t even have such large wholesale markets; they have to come here to purchase their goods!

Therefore, Wang Ye has made the development of light industry a priority.

Of course, he does not intend to do it as excessively as covering all industries and categories like another country; after all, Russia does not have that large of a population or market...

What Wang Ye wanted to focus on were industries with high added value, such as chip wafers, electronic products, the automobile industry, the internet, finance; if he could develop these few pillar industries well, coupled with the already strong energy sector, then Russia’s economy would take a big leap forward!

In the future, there would be no need to worry about being choked by others either...

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