Billionaire Lost $3.1 Billion in less than 90 minutes

Several high profile companies are burdened with losses, mounting debt and have a huge load of operational costs. Ironically, the companies that have either shutdown or are facing huge debts are run by billionaires.

“You only have to do a very few things right in your life so long as you don’t do too many things wrong.” Warren Buffett’s words should be an eye opener for companies that have landed in a soup in their zest to conquer the world.

One such loss was suffered by a Chinese billionaire, Yang Kai. Huishan Dairy Holdings, a Yang Kai company lost it’s $3.1 billion in less than 90 minutes.

Beginning of the company’s establishment

China’s Huishan Dairy Holdings Company Limited was founded in March 31,2011 by Yang Kai. It’s headquarter is in Liaoninag provice of China. The Company grows and processes alfalfa and supplementary feeds. It also processes concentrated feed, operates dairy farms, and manufactures and sells dairy products, including milk and whey power products.

Billionaire Lost $3.1 Billion in less than 90 minutes

 “Creating China’s most trusted dairy brand is our enterprise’s dream,” Mr Yang said in 2015.

Sudden downfall of the company

Yang turned a former arm of the state into what he had described as an industry-leading innovator. But he is now battling for his company’s survival. A series of events over the past two weeks laid bare the extent of Huishan’s money troubles. The milk producer has suddenly tumbled in Hong Kong as well. On 24 March, they reduced the value of Yang’s stake to $530 million from $3.6 billion.
But the reason behind this sudden downfall is still unclear.

Billionaire Lost $3.1 Billion in less than 90 minutes
“There was no indication at that time that there was so much debt,” said Yuen, a consumer analyst with RHB Securities. He also described Yang as a confident and proud perosn. “I expected the share price to deflate, but I definitely did not expect it to blow up like this” he continued. On Thursday, representatives of Huishan were called into a meeting with 23 of its major local creditor banks. It included ICBC, Bank of China, Bank of Communications and China Development Bank.
Officials from the Shenyang municipal government, the finance administration office, and the provincial banking regulator also attended the meeting.

Reasons Why Billionaire Lost $3.1 Billion in less than 90 minutes

“Huishan has been constantly raising capital via sale-leasebacks on its assets over the last year with little-known financial leasing companies. It suggests the company is quite desperate for cash,” said Robin Yuen. “The company says it is simply ‘rolling-over’ higher rate loans from before with the new lower rate loans, which is not entirely convincing.

Billionaire Lost $3.1 Billion in less than 90 minutes

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