Golden Spoon Investment Portfolio - Chapter 515

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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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515. This wouldn’t be good for either of us.

[Government Demands Intensive Restructuring from Daekwang Group, Including Chairman’s Personal Asset Injection]
[Daekwang Group to Provide 10 Trillion Won in Collateral, Including 1 Trillion Won in Chairman’s Personal Funds, for Normalization]
[Chairman Yu Chun-seok Declares Retirement from Management if Restructuring Fails!]
[Creditor Consortium Reviewing 4 Trillion Won in New Credit and 10 Trillion Won in Maturity Extensions for Daekwang Group]

The financial sector and stock market were hit with a megaton-level shock when news of Daekwang Group’s restructuring finally exploded, despite everyone’s initial disbelief.
The Goldbank collapse, which had been the hottest issue until then, was buried in an instant—a testament to just how massive the shock was.
As the second-ranked conglomerate in the business world after Hyunwoo, and the corporation that best embodied the phrase “too big to fail,” Daekwang Group’s troubles delivered an enormous blow to the economy and the nation.
In the midst of this upheaval, Daekwang Group’s restructuring brought Seok Won-han an unexpected opportunity.

“So you’re saying Daekwang Group has been probing whether we’re interested in acquiring their headquarters building in front of Seoul Station?”

Jung Gyu-chul, president of Blue Hole Construction, answered Seok Won-han’s question with barely contained eagerness as he sat in the seat of honor with one leg crossed.

“Yes. They’ve proposed selling the Daekwang Center Building for 220 billion won on the condition that Daekwang Group continues to lease and occupy it, with the option to repurchase it five years later.”
“The fact that they’re inserting a repurchase clause suggests they’re short on liquidity and want to sell the building, but they’re not ready to let go of it completely.”
“The building is a landmark standing in front of Seoul Station, the gateway to Seoul, and more importantly, it carries the symbolic weight of being the group’s headquarters. So they likely view this as temporarily pledging it to us as collateral during difficult times, not as a true sale.”

Even ordinary people held onto their homes as long as possible before selling them as a last resort, so I understood their sentiment to some degree.

‘But when the massive accounting fraud is exposed not long from now, Daekwang Group won’t recover and will simply collapse into dust. They’ll never reclaim that building.’

Seok Won-han, who had briefly recalled memories from before the regression, cleared his thoughts as Jung Gyu-chul continued.

“Not only the Daekwang Center Building, but they’re also willing to sell the Daekwang Securities Building in Yeouido for 32 billion won.”
“Does that one also have a repurchase clause attached five years later?”

Jung Gyu-chul shook his head at Seok Won-han’s question.

“The Daekwang Securities Building is being sold outright, with no such conditions.”
“It seems they’re simply abandoning it since it’s less important than the headquarters building in front of Seoul Station.”
“Located in the Yeouido financial district, it’s a substantial property with three basement levels and eighteen above-ground floors, totaling approximately 39,087 square meters. Moreover, it was completed in 1984, so it’s not particularly aged, and its real estate value is quite considerable.”
“True, being on a major avenue gives it significant investment value as an office building.”

Having spent half a lifetime in the Yeouido Securities District before my regression, I was the one person who knew the Daekwang Securities building better than anyone else.
Then, memories of Manager Oh—my investment mentor and someone like an older brother—suddenly surfaced in my mind.

“They say the world turns in circles, and it seems that saying is exactly right.”

As always today, Manager Oh sat in his fishing chair—now as naturally as if it were his own personal seat—wearing Adidas slippers and smoking a cigarette. I set down my shoes, which I’d dusted clean of dirt, and asked him a question.

“What do you mean?”
“That Daekwang Securities building right in front of us. Didn’t you hear that Daekwang Securities repurchased it yesterday?”
“I heard five companies were competing to acquire it, but it looks like Daekwang Securities ended up winning the bid.”
“That’s right. For Daekwang Securities, it’s like reclaiming their old home that they had to sell at a pittance with tears in their eyes during the IMF crisis.”
“Then that’s a good thing, isn’t it?”

Manager Oh tapped ash from his cigarette lightly into the empty paper cup that had held his coffee.

“Do you know how much Daekwang Securities agreed to pay to the Deutsche Bank subsidiary real estate company when they reclaimed their headquarters building this time?”
“How much?”

As I asked with curious eyes, Manager Oh lifted his chin and answered.

“A whopping 180.784 billion won.”
“Wow, that’s enormous. But considering the crazy Seoul real estate prices these days, it’s not cheap, but it’s not bad either, is it?”

Manager Oh flicked his cigarette between his fingers.

“You’re right that real estate prices are insane. But do you know how much Daekwang Securities sold the building for when Daekwang Group went bankrupt?”
“I’m not sure.”
“They sold it to Goldman Sachs for 47.8 billion won. That would have been around 2001.”

I tilted my head and let out a gasp.

“That’s less than half the price from seven years ago.”
“Want to know what’s even more ridiculous?”

Manager Oh drew in the white cigarette smoke deeply, then exhaled it slowly toward me as I looked at him with curiosity.

“Less than three years after Goldman Sachs purchased the building, they sold it to Macquarie for 72 billion won. And three years later, Macquarie sold it to the Deutsche Bank subsidiary real estate company for 112 billion won.”

A bitter expression crossed Manager Oh’s face as he spoke.

“Foreign investors bought and sold among themselves, driving up the prices, and then resold everything to Daekwang Securities—the original owner—at a massive markup.”
“Hearing that makes my chest tighten.”

Seok-won’s expression darkened with regret as well.

“The Daekwang Securities building isn’t the only Seoul real estate that was sold dirt-cheap to foreign investors during the financial crisis and then resold at premium prices.”
“That’s true.”
“We’ve learned a harsh lesson. We need to stay vigilant and make sure we never get fleeced like this again.”

With that, Manager Oh lit another cigarette.
Seok-won reflected on the conversation he’d had with Manager Oh, murmuring to himself.

‘As long as I’m here, foreign investors will never again sweep up real estate dumped by cash-strapped companies at bargain prices and pocket massive profits in just a few years like they did before my return.’

Having steeled his resolve, Seok-won turned his attention back to President Jung Gyu-chul.

“So you’re saying we should accept Daekwang Group’s proposal, President Jung?”

President Jung Gyu-chul leaned forward and answered promptly.

“Yes. Both buildings are premium properties—acquiring them guarantees profit. If Daekwang Group weren’t in crisis with restructuring sweeping the entire conglomerate, they would never have put these on the market.”

Even without President Jung’s explanation, I knew better than anyone that these were properties that would make money.

‘If my memory serves, when Morgan Stanley acquired the Daekwang Group Headquarters building in 2007, the purchase price was 960 billion won.’

Even selling it later at the same price would yield more than a fourfold profit.

‘And considering the rental income we’d collect while holding it, it’s literally having your cake and eating it too.’

This was easier money than lying down and swimming—there was no reason not to do it.
I picked up my teacup, took a sip of coffee, set it down, and asked.

“Are those two properties the only ones Daekwang Group is trying to dispose of urgently?”
“No. There’s one more, but it’s not a building.”
“Then what is it?”

At my question, an unfamiliar place name tumbled from President Jung Gyu-chul’s lips.

“It’s the Suyeongman Reclaimed Land in Busan.”
“A place like that exists?”

Seeing the puzzled tilt of his head, President Jung Gyu-chul launched into a detailed explanation of Suyeongman Reclaimed Land.

“When the 1988 Seoul Olympics decided to hold the yacht competitions in Busan, they reclaimed a sandy coastal area between Haeundae’s Dongbaek Island and the Suyeong River Estuary—that’s what became Suyeongman Reclaimed Land.”

Noticing Seok-won’s interest, President Jung Gyu-chul continued.

“At the time, Daekwang Group handled the yacht arena construction and received the remaining reclaimed land as payment in kind.”
“If it’s oceanfront property adjacent to the famous tourist destination of Haeundae, the value must be quite substantial.”
“Exactly. After the reclamation, surrounding land values skyrocketed, which sparked allegations of favoritism from political circles and caused considerable headaches.”
“Being right in the city center with ocean access, the land price must be considerable.”
“I understand that Daekwang Group’s 59,000 pyeong of reclaimed land has a public appraisal value of 230 billion won alone.”
“That’s quite a substantial parcel.”

While Seok-won showed interest with an impressed sound, President Jung Gyu-chul shrugged his shoulders.

“However, for the 2002 Busan Asian Games, Busan imposed restrictions on Suyeongman Reclaimed Land—requiring ultra-high-rise buildings as part of mixed-use complexes rather than standard apartments—which significantly diminishes profitability if development proceeds.”
“In other words, it doesn’t make money.”
“Building office towers, condominiums, hotels, and art museums makes it extremely difficult to achieve viable returns in reality.”

President Jung Gyu-chul shook his head slightly, speaking skeptically.

“Beyond the land cost alone, the project requires hundreds of billions in construction expenses with low profitability, so Daekwang Group hasn’t broken ground and has simply left it vacant for years. Even attempting to sell it yields no buyers—it’s become a white elephant.”
“I see. So that’s how it is.”

As I listened, something surfaced in my mind.
Before my regression, when I briefly visited Busan, I’d seen a place near Haeundae lined with distinctive high-rise buildings designed like Singapore or Hong Kong, overlooking the sea—and now that I thought about it, that was precisely Suyeongman Reclaimed Land.
It was an exotic and striking landscape, the kind of location that appeared without fail whenever media introduced Busan.

‘The prices of those residential-commercial complexes there supposedly reached tens of billions per unit, rivaling Seoul’s exorbitance.’

If that were true, then contrary to the current assessment of low profitability, it could certainly generate substantial returns.
After finishing my mental calculations, I spoke to President Jung Gyu-chul.

“If there are no buyers, negotiations could bring the price down significantly.”
“With new credit facilities and extensions on short-term borrowing maturity, we’re committed to the government to liquidate roughly 400 billion won in real estate assets and secure the shortfall in cash—so we absolutely must sell Suyeongman Reclaimed Land. With the right approach, we could acquire it below the public appraisal value.”

Jung Gyu-chul, who had answered, glanced cautiously at Seok-won before posing his question carefully.

“Are you interested in Suyeongman Reclaimed Land?”
“It’s prime real estate right in the heart of Busan. If we can acquire it at a reasonable price, we should be able to secure decent profitability, wouldn’t you say?”
“Well… if the domestic economy activates and Busan real estate prices rise further, there might be potential, but frankly, I’m skeptical at present.”

No matter how excellent the location, the problem was the numerous restrictions attached to it.
However, Seok-won, who knew the future, smiled at the corners of his mouth and displayed unwavering confidence.

“I think it’s worth attempting, so in addition to the two buildings we discussed earlier, let’s acquire Suyeongman Reclaimed Land as well. Of course, don’t forget to bring the price down as much as possible.”
“If we bundle three large properties together, even Daekwang Group, which is desperate for cash, will negotiate to some degree.”
“I trust you’ll handle it well.”

The transaction totaled a staggering 500 billion won across all three properties, but Jung Gyu-chul, having come to understand Seok-won’s financial capacity through their dealings thus far, harbored no concerns whatsoever about the acquisition funds.

“This way, we’ll be providing all the funds that Daekwang Group was trying to raise through real estate asset sales.”

Jung Gyu-chul stroked his chin as he spoke.

“Daekwang Group can secure cash and extinguish their immediate crisis, while we acquire premium real estate at bargain prices. It’s mutually beneficial, isn’t it?”
“Ha ha. You’re absolutely right.”

At Seok-won’s words, Jung Gyu-chul broke into a hearty laugh.

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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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