The Return of the Ruined Chaebol's Third-Generation Heir - Chapter 16

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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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The Regression of a Fallen Chaebol’s Third Generation — Episode 016
“As you mentioned, there are indeed many small and medium enterprises facing liquidity crises in the Banwol Industrial Complex and Ulsan Mipo areas.”
The Tea House where we’d first met.
Jung Tae-sung settled into his seat and immediately withdrew a thick folder from his document bag before speaking.
I waited quietly for his briefing.
“Among them, there is exactly one company that meets all three criteria you mentioned: possession of an operating license, secured land, and the right management mindset.”
I felt a spark of interest.
Honestly, the conditions I’d set were so stringent that I’d have been satisfied with just two out of three. Yet here was a company that checked all the boxes.
“Which one?”
“A small enterprise called Sinhwa Weltec.”
Jung Tae-sung slid the documents across to me.
“They’re located within the Ulsan Mipo National Industrial Complex. As you know, with petroleum and chemical infrastructure right next door, it’s optimally positioned for raw material procurement.”
“Mipo… The location passes the test.”
“What’s more important is the licensing. They’ve already completed all permits — dangerous chemical handling permits, high-pressure gas handling registrations, and wastewater and air pollution discharge permits.”
I nodded while scanning the documents.
This was the crux of it.
If I were to build a factory from bare ground now, just obtaining those permits would take two years minimum. The moment I acquire Sinhwa Weltec, I gain two years of time.
“What’s their main business?”
“Ultra-high-purity wet chemical for semiconductor wafer cleaning is their primary focus.”
“Cleaning solution?”
“Yes. They blend high-purity hydrogen peroxide, sulfuric acid, ammonia, and other chemicals to create solutions used in semiconductor cleaning processes. They also possess foundational CMP slurry materials and specialized gas-blending technology related to NF3.”
Cleaning marks the beginning and end of semiconductor fabrication.
A single wafer goes through dozens of cleaning cycles, and if even the slightest impurity contaminates the chemicals used, the yield collapses entirely.
That’s why the technology barrier is so high.
“How capable is their technology? It’s not just simple mixing, I assume?”
“That’s the real jewel of this company.”
Jung Tae-sung spoke with unmistakable conviction.
“They possess high-purity hydrogen peroxide refining technology. They source raw solution and manage metallic impurities below the parts-per-billion level through their own purification process. Among domestic small and medium enterprises, only a handful can achieve this standard.”
My eyes lit up.
‘Bingo.’
Not simple blending — they have proprietary refining technology.
This is the kind of technology whose value skyrockets exponentially as semiconductor processing becomes more advanced.
While large corporations use overseas major suppliers, smaller semiconductor manufacturers and LCD lines have no choice but to source from cost-competitive local vendors.
“A niche market. Too small for conglomerates to enter, yet impossible for non-technical small enterprises to penetrate.”
“Precisely. Sinhwa Weltec competed in that gap through process-customized recipes. However, the technology gap with major players remains substantial.”
“Remained… I see.”
I trailed off and turned to the financial statements page.
Grim numbers glowed in red.
[2000: Revenue 12 billion won / Operating profit 600 million won]
[2001: Revenue 9.5 billion won / Operating profit –200 million won]
[2002: Revenue 7 billion won / Operating profit –800 million won]
[2003 H1: Revenue 3 billion won / Operating profit –600 million won (estimated)]
“Good technology but a broken company. Is this the typical limitation of an engineer-founder CEO?”
“That’s it. The founder placed absolute faith in technology and obsessed over research and development.”
Jung Tae-sung added with a rueful expression.
“Attempting to compete with Japanese and American majors, he failed to break through distribution channels. Sales capability didn’t keep pace with technical prowess. Moreover, after the Dot-com Bubble collapse, semiconductor investment contracted sharply, and the company took a direct hit.”
The charts revealed structural problems.
“Their debt is… thirty billion won?”
“Yes. Twenty billion in bank loans, plus another ten billion in equipment leases and other obligations. Most of the high-purity refining equipment and tanks came in through leasing, but as revenue dried up, they can’t service the interest.”
The fixed costs outweighed what the company earned, so the banks would never sit idle.
“What’s their current status?”
“The creditors — primarily regional banks and leasing companies — are pushing for a pre-packaged sale before legal management proceedings. If it goes to legal management, their recovery rate drops, so they’re trying to find a new owner beforehand.”
A pre-packaged sale meant the company, creditors, and prospective buyer would agree on sale terms in advance
then submit the plan to the court at the moment of rehabilitation commencement, proceeding directly to the sale process.
“What price do they have in mind?”
Jung Tae-sung paused before answering.
“Book value is assessed at over eight billion won, but their actual asking price is around six billion won.”
“Six billion…”
“The banks and other creditors will accept whatever sums they’re owed, while the Sinhwa Weltec management claims that figure is appropriate when debt settlement, back wages and bonuses for employees, and the property are included.”
I rested my chin in my hand and tapped the calculator.
Six billion.
The cash I’d kept at SJ Holdings was five billion. I was short one billion.
Of course, the 15 billion in stocks I’d burned was multiplying, and if I told Executive Director Kim Seok-jun, he could probably squeeze out another billion.
But.
‘I can’t pay full price for a dying company.’
The technology is a jewel, but the company’s financial condition is terminal.
Moreover, it’s now 2003.
The one who holds cash is king.
“That’s expensive.”
When I said it flatly, Jung Tae-sung’s eyes brightened.
“It seems the management’s position is that even if the company is sold, they must settle the debts and employee wages on their way out.”
The current management’s mindset didn’t appear unreasonable. It was just that from a buyer’s perspective, I questioned whether that price was fair.
“What about the employees?”
“Sixty-three total. Ten are R&D personnel, forty are production staff. Everyone is anxious about wage delays, but there’ve been no departures yet due to trust in the founder.”
Every condition was perfect.
Except for the company’s terminal financial state. Or rather, that made it even more perfect.
I could become the savior and take control.
“To summarize: they have technology. But there’s a clear gap with major players, yes?”
“Additionally, there’s the problem that they’re asking for more money than we have on hand.”
I nodded. Even if I pulled in more cash and acquired them, the post-acquisition costs would be staggering.
I couldn’t meet the creditors’ six-billion-won demand. If that was the case, I needed to devise an acquisition strategy.
“For now, I need to think it over. Let’s meet at Executive Director Kim’s home in a week.”
“Understood. We’ll also gather more materials on Sinhwa Weltec in the meantime.”
After parting with Jung Tae-sung, I headed home.
I had much to do.

* * *
Kim Seok-jun’s study in Seongbuk-dong.
The room held only the occasional sound of turning pages.
Kim Seok-jun carefully reviewed the report Jung Tae-sung had submitted. As he closed the final page and removed his glasses, he spoke.
“I see. The asking price is six billion won.”
Kim Seok-jun let out a small laugh.
“Kang Seon-woo’s going to have a headache. He’s only got five billion cash left.”
One billion. In the M&A world, that’s not substantial, but in a situation where cash is tight, it was a mountain that couldn’t be crossed.
Jung Tae-sung asked in his measured tone:
“Shall we look for ways to help?”
A word from Kim Seok-jun could move regional bank presidents or leasing company executives with a single phone call. Cutting one billion won or indirectly providing the shortfall was child’s play for him.
But Kim Seok-jun raised his hand to stop him.
“No. Let it be.”
“…You say just let it be.”
“Exactly. Don’t interfere.”
At Kim Seok-jun’s words, Jung Tae-sung fell silent, concentrating intently as if trying to read his meaning.
“What that boy has shown so far has been remarkable. The eye to read the stock market, the insight to penetrate future industries. It was extraordinary for a high schooler.”
He acknowledged that. That’s why he’d given two billion won without hesitation.
But.
“That’s all intellectual work. Scribbling with a pen at a desk, juggling numbers while watching a monitor.”
Kim Seok-jun’s eyes sharpened.
“But a corporate acquisition is different. Creditors out for profit, technologists clinging to pride, and anxious employees. It’s a quagmire of entangled human beings.”
Kim Seok-jun looked at Jung Tae-sung again.
“This time, I need to see if his practical strategies are sound, not just his words.”
It was a test of sorts.
Anyone can buy when they have plenty of cash.
A merchant’s true skill shows when the pockets are light or when the other party refuses to sell.
“How he corners the creditors when short one billion. How he works the company founder when it’s collapsing. That process will reveal his true capacity.”
Kim Seok-jun’s expression mixed worry and anticipation as he touched the papers before him.
‘If he gets stuck here and starts whining, then my judgment was wrong.’
He could run to me asking for the missing money. Or he could desperately sell stock to raise funds.
In the worst case, he could abandon the acquisition entirely.
Whatever he chose would reveal the limits of Kang Seon-woo as a man.
“Just watch from the sidelines. Only until he’s about to fall off the cliff.”
“I understand. I’ll keep that in mind.”
Jung Tae-sung bowed.
Kim Seok-jun pushed the report to the side of his desk.
“You can go.”
After Jung Tae-sung left, Kim Seok-jun sat alone in contemplation, fingers interlaced.
“One billion short… What would I have done?”
His heart raced. Thoughts he’d normally never entertained wouldn’t leave his mind.
How to put it. When talking with Seon-woo, or imagining what he might do, memories of the field days, when he was still running things, kept surfacing.
“Ha. Meeting one clever kid and now I’m lost in all manner of thoughts.”
Kim Seok-jun chuckled and returned to examining the documents.

* * *
Back home after meeting Jung Tae-sung, I spread Sinhwa Weltec’s financial documents across my desk and rolled a pen in my fingers.
‘A method to acquire them…’
It wasn’t that I lacked methods.
Quite the opposite. There were too many methods.
Twenty years in my previous life.
I’d fought off every hyena circling Seonjin Group.
Knowing only defense doesn’t mean I’m ignorant of attack. Proper defense requires understanding the mechanics of attack better than anyone.
I’d grasped the fundamentals of M&A to the bone.
‘The creditors and management want six billion.’
That’s merely their hope.
If I slapped my five billion cash on the table and said take it or go to auction and get nothing, they’d stamp approval at five billion.
Cash is what they need right now.
‘But…’
I tapped the pen rhythmically, my brow furrowing.
‘If I spend all five billion, there’s nothing left after.’
The point isn’t to buy an empty shell of a factory.
My goal is to acquire Sinhwa Weltec, pour R&D funds into it, bring in cutting-edge equipment, and widen the technology gap.
For that, I need at least ten billion, no, twenty billion remaining for operations.
If I dump all five billion into the acquisition, I’d be left without fuel to run the engine — dead in the water.
“Conserve funds while securing management rights.”
It was a paradox.
I reviewed the documents once more from the beginning to clear my head.
‘No matter how I look at it, the merchandise is solid.’
The prime real estate of the Ulsan Mipo complex.
Ten thousand pyeong of spacious land was more than enough to expand production lines later, and most crucially, the hazardous material handling permits and waste disposal licenses were still active.
These stamps are crystallized time — you can’t buy them even with money.
‘I won’t find another small business like this even if I search.’
In other words, I had to acquire this company no matter what.
I stared intently at the debt section of the balance sheet.
The numbers danced before my eyes.
[Total Debt: Approximately 3 billion won]
– Secured Debt (bank): 2 billion won (factory and equipment as collateral)
– Unsecured Debt (supplier credit, unsecured loans): 1 billion won
‘Three billion in debt…’
Banks hold two billion, and material costs or borrowed credit account for one billion.
Wait.
My eyes froze on the words “secured debt: two billion won.”
‘The banks have collateral. That’s why they’re betting confidently.’
They believe that even if the company fails, they can sell the factory and equipment and recover the two billion principal.
But the unsecured creditors — the suppliers who lent one billion?
If the company goes into legal management or gets auctioned, they recover nothing. Not a dime.
In other words, the banks are the ones most urgent and fearless, while the suppliers are the ones most terrified.
“…”
After staring at the documents for a long moment, a spark ignited in my mind.
“Wait. This…”
Do I really need to pay off all three billion in debt at once?
In the current situation, I just need to extinguish the immediate fire choking the company.
In that instant, the fog lifted and my vision cleared.
I slowly curled my lips into a smile.
“Right. There’s no need to tangle them together.”
I shouldn’t lump the three billion in debt into one thing.
“All I need to do is separate the company from the bank.”
Silence the banks, and the rest…
A way to acquire the company without spending all five billion.
The answer was in the financial statements.

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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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