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Chapter 79




< The Hyunbo Group's Bankruptcy. >
#79
The Hyunbo Group's Bankruptcy.
“Did you rest well?”
“Yes, Grandfather.”
Grandfather warmly greeted me upon my return from Busan.
“Chairman Jang visited, didn’t he?”
“Yes. He asked for a loan just as you predicted.”
“It must have been urgent. Last time, he acted as if he wouldn’t see us again.”
I smiled slightly.
Grandfather shook his head.
“With their cash flow cut off, they’re a sinking ship. The other conglomerates are probably discussing how to benefit from Hyunbo’s collapse. They’re like hyenas. Tsk.”
“Hyunbo is just the beginning. Il Sung and Daehyun won’t be safe either.”
“Huh. If what you say is true, it means the country’s economy will completely collapse... I can’t quite believe it.”
“It’s a side effect of rapid growth. This was bound to happen at some point.”
“Yes, it was.”
The president, who had gained widespread public support by pushing for reforms like the eradication of the Hanahoe clique after taking office, was now facing ridicule as the Republic of Accidents due to several large-scale incidents and accidents.
He tried to boost his approval ratings by aggressively promoting South Korea’s 1996 OECD membership and the achievement of a per capita GDP of $10,000.
However, behind the scenes, there was a time bomb: a current account deficit of $39 billion, a short-term foreign debt ratio of 211% relative to foreign exchange reserves, and an average debt ratio of 317% in the manufacturing sector.
Whatever the case, it was about to explode.
“Grandfather, this is just the beginning.”
History flowed as I knew it would.
* * *
On January 6, Chairman Jang of the Hyunbo Group attempted to issue 450 billion won in convertible bonds to put out the immediate fire. However, due to the stock market crash and other adverse events the next day, it failed.
On January 9, the group was on the brink of bankruptcy, unable to cover a 1.2 trillion won bill. However, they managed to overcome the crisis with emergency support from banks.
They tried to raise funds by putting up their real estate, but it was impossible to sell over 3 trillion won worth of properties all at once.
Another attempt to issue 350 billion won in convertible bonds also failed, as no one was willing to buy them.
They even tried contacting Pyeongchang-dong but were rejected.
Hyunbo pretended to enter emergency mode by replacing executives and continued to request help from banks and the government.
On the 17th, they managed to cover a 500 billion won bill with the bank's help, but the bomb wasn’t over yet.
On January 20, Chairman Jang again requested 3 trillion won in support, but the creditors rejected it.
“Chairman, please step down from your management position. We’ll do whatever it takes to save the company.”
“We’ve already helped you twice. We can’t support you any further. Please step down from your management position.”
The creditors’ demand was simple: the Jang family had to give up their management rights.
With the presidential election this year, the ruling party and the government could be embroiled in favoritism controversies. If the Jang family gave up their management rights, they planned to provide emergency funds to normalize the company.
However, Chairman Jang held hostage subcontractors and partners, believing the government wouldn’t just watch Hyunbo go bankrupt.
He knew the creditors had lent him over several trillion won.
“With 3 trillion won in support, we can easily get the company back on track. We’ve already put up our real estate and are continuously trying to issue convertible bonds. Please help us one more time, and I’ll show my gratitude.”
However, the creditors and Chairman Jang ultimately failed to reach an agreement, and the negotiations broke down.
“Stupid bastards. If Hyunbo collapses, the country will collapse. Hey! Let’s head to Pyeongchang-dong quickly.”
He lashed out at the driver, who had been sitting quietly, and headed to Pyeongchang-dong.
He planned to somehow persuade Chairman Cheon to lend him money.
Despite the situation, Chairman Jang wasn’t worried about the bankruptcy.
‘How do I persuade Chairman Cheon?’
* * *
“Will you meet him?”
“Yes, I’ll handle it.”
“Alright, I understand.”
Grandfather handed the meeting with Chairman Jang over to me.
A little while later.
When I heard that Chairman Jang had arrived, I came out of the study.
“It’s been a while, Chairman Jang.”
“Oh, you’re here too? Is the Chairman inside?”
“He’s not feeling well. You can talk to me. I have full authority.”
“Huh...”
Chairman Jang frowned, his pride hurt.
He still didn’t grasp the situation.
I smiled calmly.
“Let’s go to the reception room.”
I led him to the reception room instead of the study.
We sat facing each other without Secretary Ha.
“What would you like to drink?”
“...Is Secretary Ha not here?”
“I told you I have full authority. If you don’t want to talk, you can leave now.”
My firm tone made Chairman Jang’s expression even worse. But he was the one who was reluctant to leave. He didn’t get up.
“If you’re not going to get up, let’s get straight to the point. We have no intention of buying your convertible bonds. Hyunbo’s stocks are already worthless.”
“What? Do you even understand what you’re saying?”
“I understand that negotiations with the creditors have already broken down. Do you have the money to cover the 50 billion won bill due on the 23rd?”
The 14th largest conglomerate, the Hyunbo Group, would ultimately declare bankruptcy by writing a pledge to give up its shares because it couldn’t cover the 50 billion won bill due to Hyunbo Steel.
But 50 billion won was just the beginning. Hyunbo Steel owed over 5 trillion won.
“The bank will cover it. That’s not the urgent issue.”
“Alright, what else can you offer? Not convertible bonds.”
“Do you want something? Speak up.”
The only thing worth taking from Hyunbo was its real estate.
The prime lands across the country owned by Hyunbo Construction.
“The total value of the real estate you’ve put up is 310 billion won, right?”
“Yes, will you buy it?”
“It’s hard to pay the full price.”
Chairman Jang’s face twisted.
“Listen, young man.”
“2 trillion won. We’ll sign the contract and pay on February 1st. If you’re not interested, we can end the negotiation.”
The banks had already dumped all their Hyunbo-related stocks on the market, and the stock prices were plummeting.
Even though the stock briefly rebounded due to the completion of the Dangjin Steel Plant, the banks’ volume was too much to absorb.
“...Can you offer more?”
“No one will lend money to Hyunbo, buy its bonds, or purchase its land. The Federation of Korean Industries? They’re probably negotiating how to divide the spoils once Hyunbo collapses. You know that, don’t you?”
Chairman Jang bit his lip tightly at my words.
He couldn’t refute it.
Before coming here, he must have already asked for help from other large corporations, but they wouldn’t help easily. At best, they might have suggested selling subsidiaries at absurdly low prices. His frustration was palpable.
“Huh...”
Chairman Jang’s long sigh sounded like a surrender to me.
After the bankruptcy, I would have to compete with many others to buy the land. Hyunbo had nothing else to offer.
In the end, Chairman Jang raised his hands in surrender.
“Alright, I’ll sign the contract. But you must pay by February 1st.”
“I understand. You know the credit of Pyeongchang-dong, don’t you?”
I smiled calmly.
If the bankruptcy occurs after the contract is signed, the money will go to the creditors.
Chairman Jang won’t get a single penny.
I had Manager Ma bring the pre-prepared contract.
“Huh... You prepared this in advance?”
“It was your last chance.”
He examined the contract for a long time.
“There should be no issues. The contract has been reviewed by Yoon & Jang. We just need to fill in the amount and sign.”
Chairman Jang signed the contract. I signed it as well, and we each kept a copy.
“Thank you for the good deal.”
“Please make the payment quickly.”
“I understand. I’ll prepare it as quickly as possible and make the payment by February 1st.”
The contract was with Hyunbo Corporation, not Chairman Jang.
Even if the company goes bankrupt and Chairman Jang is arrested, the contract is designed to ensure no issues arise, having been thoroughly reviewed by expert lawyers.
“Thank you for the good deal, Chairman Jang. Let’s meet again with a smile.”
“I understand. After putting out the immediate fire, let’s meet again.”
As he left, Chairman Jang’s back showed no signs of defeat.
‘I’m looking forward to three days from now.’
“Master, the Chairman is waiting.”
“Yes, let’s go.”
Following Secretary Ha’s words, I entered the study where Grandfather was waiting.
“You look good. What did you decide?”
“I decided to buy the real estate. The market value is around 3 trillion won, but I signed