Chapter 227: Bankruptcy

Luzon.

Manila.

The headquarters of the Asian Development Bank was located here. Even though relations between Luzon and America had cooled significantly over the past two years, there were still no plans to move the ADB headquarters.

At this moment, Asakawa Masashi, the President of the Asian Development Bank, was in a special meeting with Philip Lopez, the President of Manila Bank.

Philip put down his coffee and asked with a smile, "Mr. Asakawa, I’ll be direct. Are you interested in selling the Ceylon foreign debt your bank holds?"

"What? Mr. Lopez, are you not aware of the current situation?" Asakawa Masashi asked back, a bit surprised.

"I want to take a gamble," Philip replied, his gaze unwavering.

"The Asian Development Bank holds a total of 6.7 billion in Ceylon’s foreign debt..."

But Philip interrupted him. "Plus the 10% held by East Japan’s major financial groups. Name a price."

Asakawa Masashi’s eyes narrowed slightly. "That would be 11.9 billion US dollars. If your bank can produce 11.9 billion US dollars..."

"Do you take me for a fool, Mr. Asakawa? Ceylon is bankrupt. They might not be able to repay it within the next ten years, and they might even default on it entirely. Name a price that shows some sincerity!" Philip looked at him, his tone blunt.

Asakawa Masashi considered this. He knew that collecting Ceylon’s foreign debt would indeed be difficult, and the time frame was too long. If exchange rates fluctuated, it wouldn’t necessarily be a good thing for the Asian Development Bank or East Japan’s financial groups.

"I need to discuss this with the board of directors and the debt holders in East Japan. We will give you an answer the day after tomorrow, Mr. Lopez."

Philip smiled and shook his head. "No problem, take your time. But my patience is limited. In a few days, the price might not be the same."

In response, Asakawa Masashi simply wore a practiced, professional smile. "I can’t make the decision on a matter like this. To be honest, I am also very hopeful we can cooperate with Manila Bank."

"Then I shall await your good news."

Watching Philip Lopez’s retreating back, Asakawa Masashi’s smile vanished, his eyes glinting thoughtfully.

He couldn’t quite figure out the motives of Manila Bank and the Lopez Clan.

But since he couldn’t figure it out, he didn’t dwell on it. Instead, he picked up the phone and first called his contacts in East Japan, explaining the situation to the few behind-the-scenes bosses of the financial groups.

Immediately after, he convened a board meeting for the Asian Development Bank.

The shareholding structure of the Asian Development Bank was very complex, yet also very simple. One only needed to look at the top three shareholders: East Japan with 15.6%, America with 15.6%, and Huaguo with 6.44%.

Therefore, convening a board meeting was, in reality, a game of strategy between the top three shareholders.

Asakawa Masashi, Jim Benjamin, Guo Yujin, along with Li Guangming from Xing Island and Park Hyun-je from South Korea, held a video conference.

After hearing what Asakawa Masashi had to say, everyone fell into deep thought.

In San Francisco, Jim picked up his coffee. While pretending to sip it, his mind was racing.

The current composition of Ceylon’s foreign debt, on the surface, showed the Asian Development Bank as the largest creditor, holding 13%. This was followed by East Japan’s financial groups with 10%, the Bank of China with 10%, the World Bank with 9%, Tianzhu with 2%, and other countries with 9%.

The remaining 47% was sovereign debt, primarily held by financial institutions in Europe and America. Within that, the Wall Street Financial Group held about 26%, followed by British Financial Institutions with 11%, and French financial institutions with 6%. The final 4% was divided among other smaller financial institutions in Europe.

The core of Ceylon’s foreign debt was actually that 47% in sovereign debt, because that portion was essentially high-interest loans.

Jim was well aware of Ceylon’s foreign debt problem. He put down his coffee. "Manila Bank wants to acquire this debt at a low price? I’ll need to think about it. What are East Japan’s thoughts?"

Asakawa Masashi replied with a smile, "We also need some time to consider."

The Asian Development Bank was, in essence, a special product of America’s strategy to play games of alliance and intrigue in the Asia Region, using East Japan as a front. As a lapdog, Asakawa Masashi was very clear about his position—everything was simply a task from his master.

Now that Jim hadn’t made the final call, he naturally wouldn’t state his position.

The directors from Xing Island and South Korea also remained ambiguous.

Faced with this, Guo Yujin could only go with the flow and wait to see how things developed.

At the same time as the Asian Development Bank’s board video conference was being held...

Ceylon’s announcement that it was entering a state of bankruptcy had caused the financial institutions holding its sovereign debt to grow anxious.

Although a national bankruptcy was different from a corporate one, as there was no way to conduct a liquidation, entering a state of bankruptcy protection still meant a debt freeze.

This so-called debt freeze meant that the money couldn’t be repaid now. The matter of repayment would only be considered whenever they had money again.

International financial institutions were in the business of making money. If Ceylon remained in a state of bankruptcy for a long time, it would mean this debt would go unpaid for an extended period, possibly even becoming bad debt.

These financial institutions now faced two choices.

One was to cut their losses and exit. Manila Bank was currently acquiring Ceylon’s sovereign debt at a low price on the international financial market, so they could sell their holdings to them.

The other option was to hold on and wait for Ceylon to emerge from bankruptcy protection.

However, on October 15th, the secret flight of Ma Xing and the two West Asia brothers to Dubai threw Ceylon into further chaos.

Immediately after, the Solomon Clan and the Puda Clan attacked each other, leading to a brutal and bloody conflict. In the end, the key figures of the Puda Clan hastily fled to Maple Country.

And the Solomon Clan, despite being victorious, had also suffered heavy losses.

Several of the Solomon Clan’s key figures died tragically in the turmoil, leaving only the 19-year-old daughter of the Patriarch. Through a flash marriage, she married the newly risen supernova of the Eastern Province—Dis Jameet.

On the surface, Dis appeared to be a puppet propped up by the Solomon Clan, but in reality, he was the great alligator that had turned the tables.

To secure his position, Dis continued to maintain the bankruptcy protection and then immediately announced the relocation of the capital from Colombo to the inland city of Gem City in the Central Province.

This series of bizarre moves left the outside world completely baffled.

But then, a more troublesome matter "appeared": food reserves across Ceylon were nearly depleted, and gas, fuel, daily necessities, and medical supplies were all becoming scarce.

Dis played dirty, announcing that the state of bankruptcy would be extended to 2030.

As soon as this news broke, the financial institutions holding Ceylon’s sovereign debt nearly coughed up blood. In response, Manila Bank lowered its acquisition price to about 20% of the original value.

Meaning, for 25 billion US dollars of Ceylon’s sovereign debt, Manila Bank was only willing to pay 5 billion US dollars.

Although much of the Ceylonese debt held by institutions like the Asian Infrastructure Investment Bank, the World Bank, East Japan, and the Bank of China consisted of low-interest or even no-interest loans, a long-term failure to repay would still affect their performance.

Unfortunately, Dis was now completely shameless, adopting an attitude of "do whatever you want," because he didn’t have a single penny to give them anyway.

This prompted Manila Bank to continuously lower its acquisition price for Ceylon’s sovereign debt.

Many financial institutions that felt they couldn’t hold on any longer reluctantly cut their losses and exited the market.

But as the person in charge of Manila Bank, Philip knew very well that the institutions cutting their losses now were mostly smaller ones.

Currently, Manila Bank had only acquired 7.6% of the sovereign debt.

The Wall Street Financial Group, British Financial Institutions, and BNP Paribas all chose to continue holding their debt. Clearly, someone did not want Manila Bank to gain control over Ceylon’s foreign debt.