The Youngest Son of Sunyang

Chapter 43 Let's Warm Up First 2

"Study on Han Do Steel's Competitiveness and Medium-Term Management Prospects."

Extremely weak financial structure.

Excessive financial costs due to excessive external borrowing.

Significant confirmed losses.

Imprudent investments that could have a significant impact on the national economy.

Cooperation with Pohang Steel is unavoidable for Han Do Steel's survival and growth.

Conclusion.

When summarizing the thick report, it contained these contents.

Despite having 13 subsidiaries and being ranked 18th in the industry as of 1995, the actual group revenue was a mere 400 billion won (5.9 billion won excluding internal transactions).

Han Do Group, especially Han Do Steel, was like a sandcastle built entirely on debt. The collapse of this sandcastle was just around the corner, about a month away.

The fact that such a report came out within the Sunyang Group means that the bankruptcy of Han Do Steel has already been foreseen within the industry.

However, no one knows that Han Do Steel is just the beginning.

Why did Chairman Jin throw this report at me?

Is he thinking about what will happen after Han Do Steel's bankruptcy? Or is he planning to acquire the bankrupt Han Do Steel?

The latter possibility is quite clear. When you think about Sunyang Shipbuilding, Sunyang Machinery, and Sunyang Automotive, there's every reason to be ambitious. But at a low price.

Considering Sunyang Group's internal reserves, it wouldn't be difficult to acquire a bankrupt company. Furthermore, with Sunyang's lobbying ability, adding a reduction in debt of tens of billions of won to the acquisition conditions wouldn't be a big deal. Ten key personnel, each receiving 1 billion won. Handling losses of tens of billions of won with taxpayer money, it's not a big deal, is it?

What bothers me is the 1 billion dollars in U.S. hot money among Han Do Steel's external borrowings. At the current exchange rate of 800 won, there is no significant burden in paying interest or repaying principal, but it will be impossible to pay in a year.

Han Do Steel is a poison dart frog.

The moment it swallows, the poison will slowly spread, and if you can't find the antidote, it can lead to death. The antidote is the dollar, a huge amount of dollars.

I have the antidote in my hands, so I can save anyone who swallows it. The question to be decided is who will swallow it, and how much will be charged for the treatment.

It's an easy decision. I want to charge several Sunyang Group subsidiaries as treatment fees, so if Grandfather wants to swallow the poison dart frog, I have no intention of stopping him.

"Study on Han Do Steel's Competitiveness and Medium-Term Management Prospects."

Annual production volume of 800,000 metric tons, Chairman and his family own 34.65% of the shares, controlling management rights.

Severe financial vulnerability.

Excessive financial costs due to excessive external borrowing.

Large-scale confirmed losses.

Imprudent investments that could have a significant impact on the national economy.

Cooperation with Pohang Steel is inevitable for the survival and growth of Han Do Steel.

Conclusion.

The subject of the meeting that started at 7 AM on Friday was all about Han Do Steel.

"What's the total debt?"

"It's 3 trillion 6,870 billion won, excluding the 1 billion dollars from the U.S."

Chairman Jin looked at Lee Hak-jae and said, "Director Lee, no matter how much I think about it, it doesn't make sense. How can they spend so much money on just a steel mill?"

"To put it in the perspective of NewCore in the U.S., it could turn things around with 1 trillion 600 billion won. Even if we consider the differences such as cheap land, low facility acquisition costs due to the steel industry downturn, and purchasing appropriate facilities through in-house engineering instead of a turnkey basis, we should assume that at least 1 trillion won or more has disappeared somewhere."

Inflating costs and siphoning off that money through insider transactions is a specialty of conglomerates, but Han Do Group took it to another level.

More than half of the entire group's revenue comes from internal transactions!

This isn't just a gray area; it's outright robbery.

With a slightly furrowed expression, Chairman Jin continued with his questions.

"How much of the debt can be reduced?"

"We can start by having the asset management company purchase the financial institutions' debt, which should allow us to reduce about 2 trillion won. We'll buy the bonds from the asset management company at half price. So, 800 billion won should be enough."

"Dollars won't work, right?"

"No. However, we can extend the repayment period. The government will provide payment guarantees."

"YS... they're strict. Will it work?"

"Han Do Steel is Han Do Group's flagship company. Since Han Do Group is already going to collapse, we need to minimize the shockwaves. They'll approve it."

Chairman Jin's mind started calculating.

With 10 billion dollars, it's 800 billion won, and the total amount is 1 trillion 600 billion won. There was no intention to pay 1 trillion 600 billion won for the acquisition.

While it's possible to temporarily use Sunyang's funds for the acquisition, it needs to be recovered immediately.

"When Han Do Group falls apart, what do we need to secure that can be profitable?"

"Han Do Steel's Busan rebar plant site covers 100,000 square meters, excluding the logistics base. If we prevent the bondholders from intervening and build apartments on that site for sale, we should be able to secure a considerable amount."

"Anything else?"

"40,000 square meters of land in Jangji-dong and 10,000 square meters of land in Gaepo-dong. However, these lands are owned by Han Do Construction, not Han Do Steel."

The heads of the key figures in the group who attended the meeting in the study were all busy processing this information.

They all understood Chairman Jin's intention to acquire Han Do Steel.

"Chairman."

Cho Dae-ho of Sunyang Automotive, who had not spoken a word until now, opened his mouth for the first time.

"Daehyun Group is also targeting it."

The room fell silent to the point where Chairman Jin's breathing could be heard.