Golden Spoon Investment Portfolio - Chapter 310

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This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
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310. If the conversation hadn’t worked out, it would have been because I didn’t bring enough money.

Eunma Apartment, Daechi-dong, Gangnam-gu, Seoul.
The headquarters of Hansei Steel was located on the third floor of the shopping complex in this apartment complex, counted among the wealthy neighborhoods even within Gangnam.
When people learned that the headquarters of a conglomerate that had climbed four ranks to become 14th in the recently announced business rankings occupied merely one floor of an apartment shopping complex rather than a prestigious high-rise building, they were invariably astonished.
In fact, new employees at Hansei Steel were most bewildered by this very fact on their first day of work.
Though Hansei Steel was the company that had built both Eunma Apartment and Midopa Apartment, the reason no separate corporate headquarters was constructed stemmed from Chairman Choi Byung-moo’s philosophy that “a carpenter who owns his own house goes bankrupt.”
The irony was that the third floor of the Eunma Apartment shopping complex serving as headquarters belonged not to Hansei Steel but to Chairman Choi Byung-moo personally.
Of course, it wouldn’t be long before the Hansei Steel crisis erupted, and the third floor used as headquarters would be put up for auction in its entirety, but that was still some time away.
Inside the spacious Chairman’s Office at the innermost end of the third floor.
Six key executives sat with grave expressions, with Chairman Choi Byung-moo in the center.
Chairman Choi Byung-moo, a cigarette between his lips, spoke first in a heavy, subdued voice.

“So you’re saying our cash reserves have run dry?”

Director Seo Jun-je, a former vice president of Ilhan Bank who oversaw the group’s finances, answered with a rigid expression.

“That’s correct. After paying today’s employee salaries, we’ll have less than one hundred billion won remaining.”

Though it appeared substantial at first glance, it was woefully insufficient given the scale of Hansei Steel, ranked 14th in the business world.
As expected, the executives present couldn’t help but exhale softly upon hearing the figure.

“Moreover, once we settle the bills coming due over the next four days, that will be completely depleted.”
“We issued additional corporate bonds last month and disposed of real estate holdings we owned, yet we still have no money.”

Director Seo Jun-je responded to Chairman Choi Byung-moo’s irritated tone, his expression full of exhaustion.

“As you say, we secured approximately three hundred billion won through real estate disposal and corporate bond issuance, but after paying interest and covering construction costs for the Dangjin Steel Mill, it was quickly depleted.”
“Hmm.”
“Bills will come due in succession through year-end. If this continues, we may face insolvency before next week.”

At the mention of bankruptcy, everyone’s eyes widened or their complexions darkened as they swallowed silent groans.
Yet on another level, it felt as though what was always destined to come had finally arrived.
Though they had concealed it outwardly, the group’s financial situation had been deteriorating rapidly for the past year.
The construction industry was in a slump, and there was the fallout from forcibly acquiring Uwon Construction, which had gone bankrupt last year, but most critically, the Dangjin Steel Mill construction costs had ballooned to double the original estimate.
The steel mill construction budget, initially projected at approximately 2.7 trillion won, had swelled to 5.7 trillion won—if they weren’t suffering from a cash crunch under such circumstances, that would have been the real anomaly.
As the air in the room grew heavier, Director Seo Jun-je glanced around cautiously before offering his opinion.

“Perhaps we should temporarily halt or slow the Dangjin Steel Mill construction until the financial situation improves.”
“That’s not possible. Completion is just a few months away—we can’t stop construction now.”

Choi Byung-moo’s expression hardened immediately.

“We’re already struggling to cover the bills coming due immediately. There’s no way to secure the 700 billion won needed for completion.”

Then Woo Young-hak, the executive vice president and longtime confidant of Choi Byung-moo since the group’s founding, interjected.

“If we halt or slow the construction now, it’ll only add more costs.”
“If we can’t cover the bills coming due by year-end, it’s bankruptcy. The Dangjin Steel Mill isn’t the problem right now!”

Director Seo Jun-je raised his voice, his expression one of frustration.

“Is there no way to secure additional loans from the banks?”

Choi Byung-moo asked, a cigarette wedged between his fingers, and Director Seo Jun-je shook his head, his reluctance evident.

“Our primary bank, Ilhan Bank, and the entire financial sector—we already owe 3.6 trillion won in debt just for the steel operations. Add in all the other subsidiaries, and we’re looking at a staggering 8 trillion won total.”

Faced with such an astronomical sum, everyone fell silent until Director Seo Jun-je continued, his voice weighted with gravity.

“We’re paying 1 trillion won annually just in interest. In such circumstances, even if we complete the Dangjin Steel Mill, normal operations will be impossible.”

Choi Byung-moo then stubbed out his nearly finished cigarette in the crystal ashtray and spoke with resolve.

“Construction cannot be halted.”
“But our cash reserves are critically depleted….”

Choi Byung-moo cut off Director Seo Jun-je’s renewed attempt at persuasion, his tone dry and clipped.

“If we stop construction, it’ll look like we’re admitting the group is experiencing severe financial difficulties. The market will seize on that.”

The words “That’s not true” rose to the tip of my tongue, but Director Seo Jun-je barely managed to swallow them back down.
The fact that Hansei Steel’s financial situation was deteriorating was already an open secret known to anyone who mattered—not just in the Myeongdong Private Loan Market, but throughout the Yeouido Securities District as well.
The corporate bonds issued by Hansei Steel were already trading at significantly discounted prices in Myeongdong, a direct consequence of this widespread knowledge.

“When mere rumors of financial difficulty cause the stock price to plummet and capital flow to seize up, what do you think will happen if we actually halt construction at the Dangjin Steel Mill?”

When Director Seo Jun-je hesitated to answer, Chairman Choi Byung-moo’s lips curled into a cynical sneer.

“The banks will come rushing like wolves, desperate to recover their bonds before we default. Director Seo, you came from banking—you know this better than anyone.”

Because it was the truth, Director Seo Jun-je could not refute it and fell silent.

“And that’s not all. The subcontractors will panic, fearing actual bankruptcy. They’ll storm the company demanding payment for overdue invoices, or they’ll desperately liquidate their promissory notes at fire-sale prices in a frenzy.”
“….”

At this point in time, it was standard practice for prime contractors to issue promissory notes—a form of payment guarantee—rather than cash to subcontractors.
From the prime contractor’s perspective, this was advantageous since cash didn’t leave immediately and they could rotate their capital with these notes; but for subcontractors, it was nothing short of a burden.
Of course, if they held the notes until maturity, they would receive the promised amount, but most subcontractors desperate for immediate cash would reluctantly discount and sell their notes in the Myeongdong Private Loan Market.
One might ask why they didn’t simply refuse the notes, but doing so would result in losing all future orders—they had no choice.
The problem was that as rumors spread about Hansei Steel’s cash crunch, lenders in the Myeongdong Private Loan Market became reluctant to purchase Hansei Steel’s promissory notes.
As a result, subcontractors holding Hansei Steel notes had no choice but to either discount them by nearly half or reluctantly hold them until maturity.
Since selling at steep discounts meant significant losses, most subcontractors were forced to bear the burden of holding these notes until they matured.
What made Hansei Steel’s behavior particularly egregious was that while promissory notes were typically issued in three-month or six-month terms, they deliberately issued notes with nine-month to one-year terms to secure their own cash liquidity.
This was precisely why countless small subcontractors went bankrupt in a domino effect when Hansei Steel collapsed.
Chairman Choi Byung-moo’s eyes hardened with resolve, his posture conveying absolute determination never to retreat.

“If we do that, even a company that wouldn’t have failed will be driven to bankruptcy.”
“But as I mentioned earlier, without additional capital injection, we simply don’t have the funds to continue construction.”

When Director Seo Jun-je expressed his reluctance, Chairman Choi Byung-moo straightened his upper body and spoke.

“What about securing additional loans using our shareholdings as collateral?”
“Of the nine million shares of Hansei Steel held by you and your family, five million four hundred thousand shares are already pledged as collateral to the banks. That leaves only three million six hundred thousand shares remaining. Even with the recent stock price collapse, the collateral value would be approximately 21 billion won at best.”

Director Seo Jun-je spoke fluently, having already calculated everything down to this point.

“This would barely sustain us for another month or two at most—it’s not a fundamental solution.”

Shaking his head with skepticism, Chairman Choi Byung-moo folded his arms and sat in contemplation for a moment before turning his gaze toward his closest aide, Executive Director Woo Young-hak.

“Woo Young-hak.”
“Yes, sir. What is it?”
“We own several commercial spaces in the Mido Mansion Shopping Complex across the street under shell company names. How many are there?”

Woo Young-hak glanced discreetly at the other executives gathered around before answering.
“Four units of 13 pyeong and one unit of 15 pyeong.”
“What’s the current market price for those?”
“The 13 pyeong units are trading at around 80 million won each, and the 15 pyeong unit is going for just under 100 million won.”
“That should be adequate.”

Chairman Choi Byung-moo nodded slightly, then turned his head to look at Director Seo Jun-je seated to his left.

“Contact Ryu Bank Director at Ilhan Bank and tell him I’d like to meet with him urgently this evening.”
“I’ve already requested additional support multiple times, but he’s refused, saying further loans are difficult.”
“That’s precisely why I’m stepping in personally.”
“How do you intend to proceed?”

Chairman Choi Byung-moo let out a derisive snort.

“Do you know what everyone in this world loves, regardless of gender? Money. If negotiations didn’t work, it’s simply because the amount offered wasn’t sufficient.”

The way he casually spoke of offering bribes was quintessential of Chairman Choi Byung-moo, who earned the nickname “Lobbying King.”
Director Seo Jun-je and the other executives weren’t particularly shocked by such blunt language, having witnessed him overcome countless crises through bribes and lobbying over the years.
Rather, they reacted as if they’d expected nothing less, and once again harbored confidence that Chairman Choi Byung-moo would resolve the funding problem through his lobbying connections, just as he always had.

“If I’m not mistaken, I heard that this term is Ryu Bank Director’s last, correct?”

Chairman Choi Byung-moo leaned back in his chair as he asked.

“It’s customary for directors to step down after one reappointment, so that’s likely the case.”

A smile played at the corners of Chairman Choi Byung-moo’s mouth at Director Seo Jun-je’s words.

“Then it’s perfect timing—he should be thinking about his retirement soon.”

He issued his instructions with the air of someone for whom the problem was already solved.

“One bank alone may not be enough to secure all the loans we need. Arrange meetings as quickly as possible with the heads of the other three banks that have extended significant credit to the steel company.”
“Understood, sir.”

As Seo Jun-je’s response reached his ears, Chairman Choi Byung-moo withdrew a fresh cigarette and placed it between his lips.

“I survived the Suseo incident, so I can’t stumble over a mere pebble like this. Just as I’ve done until now, once the Dangjin Steel Mill is completed, everything will be resolved. Yes, absolutely.”

Chairman Choi Byung-moo murmured the words softly, as if brainwashing himself, then flicked his lighter and ignited the cigarette.
The anxiety gnawing at the depths of his chest, he deliberately ignored.

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This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
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