Flight of the Lady Part-6

Chapter 12

"Doubts are spreading among market participants regarding the Tender Offer (TOB) by Moonlight Fund for Hokkaido Development Bank.

The uncertainty arises from not understanding the purpose behind initiating the TOB. Even if the TOB is successful, if Hokkaido Development Bank still goes bankrupt, the incurred expenses would be in vain. Furthermore, even if they manage to avoid bankruptcy after gaining control, a capital reduction in the form of questioning shareholder responsibility becomes inevitable.

Typically, when taking control of a company through such a TOB, it is common to conduct a capital reduction first and then gain control through third-party allocation of new shares.

Despite these suspicions, many investors see this TOB as a last resort and welcome it. On the other hand, some local stakeholders believe that 'selling at this point won't significantly change the amount of loss' and choose to continue holding the stocks."

"We've successfully acquired nearly 36% of the issued shares, spending just over 20 billion yen. While obtaining the majority seems achievable if we continue, the cost, albeit a fraction, is still substantial," Iijou reported with a serious glare.

Securing the majority is estimated to cost around 40 billion yen, a significant amount that might seem to disappear without a trace. However, this is where the intrigue of our strategy unfolds.

"It's time for a press conference, don't you think? Please turn on the TV," I suggested, and Naomi Katsura promptly switched on the TV with a remote control.

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In the special program on the national broadcaster, a representative from Moonlight Fund eloquently responds to media questions in English. The simultaneous interpreter swiftly translates the dialogue into Japanese.

"Could you explain the intention behind Moonlight Fund's TOB this time?"

"As a turnaround management fund, our goal is corporate revitalization. In rescuing financial institutions, the local economy and the bank are closely intertwined. Local businesses not only hold bank stocks but also often use them as collateral. If these companies lose collateral and can't secure loans crucial for regional economic revival, the consequences could be severe. We believe the expenses for this TOB are necessary."

"Is it possible to rebuild Hokkaido Development Bank, which holds a substantial amount of non-performing loans?"

"In all honesty, we recognize that attempting standalone reconstruction under the current circumstances is practically unfeasible. We are contemplating a potential merger with another entity in the near future, and that's the extent of information we can share at this moment."

"I understand this might be a direct question, but there have been whispers about your group being likened to a foreign vulture fund. How do you respond to such allegations?"

"Such characterizations are somewhat expected, primarily stemming from a lack of comprehensive knowledge about who we are. We acknowledge these perceptions and commit to consistently sharing information, including instances like this press conference."

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"The expanse of the United States provides diverse options, evident in the fact that professional actors with legal qualifications can be easily found ."

"Thanks to that, we can pull off bluffs like this. When Japanese individuals are involved, there's always a tendency to underestimate, you see."

Ichijou nodded to my remark. We hired him to play the role of Moonlight Fund's advisor lawyer for the press conference. Being both a lawyer and an actor, his responses are solid, and since his credentials are genuine, any suspicions are quickly dispelled.

While the Ministry of Finance is aware of Moonlight Fund's true identity, it seems they haven't disclosed it to the media. They may be uncertain about our intentions, and if I were to back off prematurely, Hokkaido Development Bank would likely face bankruptcy once again.

"So, can we silence the Ministry of Finance?"

"Yes, the Ministry of Finance Banking Bureau has agreed to abide by the same rules as with Sankai Securities and Ichiyama Securities."

Picking up the proverbial chestnuts from the fire, which is Hokkaido Development Bank in dire straits, and mitigating the damage to the local economy through the TOB, has somewhat improved the Banking Bureau's impression of us. Of course, knowing about the success of the Securities Bureau in maintaining a successful convoy earlier, the Banking Bureau, with a zero-tolerance atmosphere for failure, was likely to accept our conditions sooner or later.

"But was it really okay not to acquire management control?"

"Do you think I, in my current state, can manage a giant bank?"

Another reason the Banking Bureau approved this acquisition is that we, the buyers, didn't insist on taking over management. In other words, not only Far Eastern Bank but also Hokkaido Development Bank and the merged Sankai Securities are to be surrendered as colonies to the Ministry of Finance. This is necessary to withdraw funds from the Bank of Japan in the order of trillions. Simultaneously, by whispering the idea of turning this bank into a 'Good Bank' to swiftly deal with troubled banks and showing a willingness to merge with the endangered Choushin Bank and the Credit (債権証券) Bank, we've finally prepared to address the bad loan issues at Hokkaido Development Bank which is in crisis.

"They're probably laughing, letting us spend money while they enjoy dealing with the overinflated Banks."

After all, if they can establish this bank, formed by the merger of three major city banks and a second-tier regional bank, along with the merger of a major and quasi-major securities firms, as the Ministry of Finance's outpost. It's becoming the perfect model for the ongoing financial Big Bang.

"No problem. Once it transforms into a de facto state-owned bank, it's bound to go up for auction, cleverly packaged as privatization, just before the financial big bang. Getting a chance to participate by receiving the memorandum would be quite advantageous, don't you think?"

This memorandum has two conditions. First, the Ministry of Finance acknowledges the eligibility for auction participation if we pursue the entire acquisition. Second, it guarantees the ownership stakes of the revitalized Far Eastern Bank, Far Eastern Life, and the remaining shares from the former Sankai Securities. The government won't be ruthless enough to nationalize even the ones we've managed to revive. Of course, behind this, there is the support of the Ministry of Finance Securities Bureau, which neatly handled Ichiyama Securities. On TV, local newspapers were asking the final question.

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"While we appreciate the consideration for the local economy, there's an understandable suspicion lingering—rumors about Moonlight Fund being a vulture fund. To the citizens of Hokkaido who are bewildered about whether we can truly trust the hand extended to us, could you share some comments?"

"That suspicion makes sense. Since Hokkaido became economically and regionally connected after unifying with the Northern Japan government, it has become a cosmopolitan place in this country, second only to Tokyo. Precisely because it's such a place, our fund's owner decided to reach out."

"Owner?"

"Yes, I not sure whether it's okay to reveal this or not? The owner of our fund has Slavic* roots. Perhaps there was a desire to extend a hand to fellow citizens of this country."

[T/N- USSR]

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"I ask to say anything like that."

"It's okay. With the young lady's approval, some improvisation is allowed. Well, she does look Slavic. If something happens, should we consider making a charitable donation?"

I have no idea. I am being tossed around by this improvisation for a long time. This improvisation will have a significant impact on the world. 

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A lawyer with an actor's license. 

It's interesting how the world works.

At that time in Hokkaido, Ratio of people authenticy 

 Per 10 people 8 Japanese, 1 Russian, and 1 Chinese .

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