The Return of the Ruined Chaebol's Third-Generation Heir - Chapter 92

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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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Regression of a Fallen Chaebol Heir — Episode 92
“Welcome.”
In the Seonjin Group CEO Office, Choi Dong-su bowed his head in greeting to CEO Kim Ja-young.
“How did it go? Any success?”
In response to Kim Ja-young’s question, Choi Dong-su set down the documents before her and began his report.
“The other party has accepted our set price of forty-five million dollars without modification.”
Kim Ja-young’s eyebrows rose sharply.
“They accepted it as is, without any price adjustment?”
“Yes, but they’ve imposed conditions in exchange.”
The buyer had accepted the price outright while attaching conditions—meaning they intended to extract their gain elsewhere.
“What sort of conditions?”
“Thirty percent deposit up front. Thirteen point five million dollars paid in advance, with the remaining seventy percent to be divided over six months following delivery.”
Kim Ja-young placed her hand on the documents.
“If it’s six months, there’s no real point in us rushing to sell.”
“That’s right. As you say, the Shipping Division is currently running at a monthly loss of five billion won. Thirteen point five million dollars comes to roughly sixteen billion won—not even three months’ worth of losses.”
“Did you stop the discussion there?”
“I pressed for the entire balance to be paid at once, but they made Due Diligence a condition. Full inspection of the vessel before delivery, with an external firm conducting it. The delivery deadline is sixty days from contract.”
Negotiation was give-and-take by nature, but the Shipping Division had no margin to wait for the other side’s terms.
And now they wanted Due Diligence on top of it all.
“They’re not planning to slash the price if problems come up during Due Diligence, are they?”
“No. They specifically said forty-five million is locked in. Unless the Due Diligence finds defects.”
Kim Ja-young fell silent, her face showing the strain of mental calculation.
“Is it possible DK is short on capital and that’s why they’re doing this?”
“No. I’ve included it in the report, but we’ve confirmed their funds are actually larger than we expected.”
“Well, that’s a relief. Are these all the conditions they’ve put forward?”
“There’s one more.”
Kim Ja-young regarded Choi Dong-su quietly.
“DK has proposed a Sale and Leaseback arrangement.”
Choi Dong-su paused. He’d been turning this over in his mind the entire drive back from the meeting. He’d been stunned when he first heard it himself.
“The structure is that we sell the vessels, but Seonjin Trading then leases them back and operates them. Ownership transfers to DK Capital, but Seonjin Trading enters into a Lease Rate contract and continues operating those ships.”
Kim Ja-young also looked taken aback.
“The terms don’t seem unfavorable to us.”
“Exactly. We secure cash by divesting assets while maintaining operations. We’ll pay DK a Lease Rate, but we eliminate ownership costs—insurance, depreciation, crew maintenance. Our operational burden decreases.”
Kim Ja-young paused to think, then spoke.
“Once you sell a ship, you can’t buy it back when the market improves. The market just gets worse again in the meantime.”
“That’s the case. And when I visited the Trading Company directly, I found that this exact point is where the Shipping Division’s discontent centers. If we sell the ships and can still operate them ourselves, we quiet internal dissent, and since it’s a similar structure to the KAMCO Ship Fund, there’s nothing detrimental to us about it.”
Kim Ja-young nodded.
“What about the Lease Rate?”
“We haven’t received concrete terms yet. I came to report after reaching the proposal stage.”
Kim Ja-young considered for a moment before asking.
“Since the terms are favorable to us, I’m growing suspicious. Where is DK Capital’s funding coming from?”
“We’ve looked into it ourselves, but nothing surfaced. It doesn’t appear to be domestic capital. Given the CEO is from Wall Street, it looks like overseas investment.”
Choi Dong-su spoke as he watched Kim Ja-young nod.
“They don’t seem like a startup investment firm to dismiss lightly.”
Kim Ja-young focused on his words.
“Usually when a buyer imposes conditions, they push a structure favorable only to themselves. This person is different. Sale and Leaseback benefits them, but it benefits us too.”
Choi Dong-su paused before continuing.
“They’ve structured it so we can’t easily refuse.”
“Is that a problem?”
“Not necessarily. It’s uncomfortable that they’ve read our situation, but since they’ve come with terms that aren’t detrimental to us, it’s not truly harmful.”
There’s no such thing as a win-win deal. We’re missing something—something they gain elsewhere that we can’t see yet, and that unsettled me.
“Let’s establish our floor first.”
When Kim Ja-young spoke, Choi Dong-su understood immediately. Don’t wait for their terms; set our standards first.
“The Lease Rate, the term, the renewal conditions—let’s establish the line we can accept, then hear their terms and continue negotiations from there.”
“Understood.”
“And keep looking for other buyers.”
“Yes, understood.”
He’d acknowledged, but Choi Dong-su knew the reality. There were no buyers for container ships in the current market.
This opportunity might well be the last they could seize in this market.

* * *
“Let’s continue with the Seonjin Trading matter.”
In the DK Capital conference room in Yeouido, Danny Kim brought up the agenda.
“They’re going to accept our final proposal on Sale and Leaseback. That leaves the Lease Rate negotiation.”
Three operational staff sat at the conference table. People Jung Tae-sung had carefully scouted from domestic operating companies.
Since DK Capital was a startup, they’d brought them on with higher salaries and signing bonuses than the industry standard.
And Lee Min-jae, an intern, was also seated here, pen and notepad in hand, but he was well aware he had no voice in this meeting.
‘So Seon-woo’s family situation has gotten worse again.’
During his first week at work, when he learned that DK was doing business with Seonjin Trading, he’d felt something odd.
It was probably because his friend Seon-woo was involved, which made him anxious in spite of himself.
“The current container ship Lease Rate market is essentially frozen. Long-term charter contracts are virtually nonexistent, and spot rates for European routes are running between 480 and 540 per TEU. There’s no comparable recent transaction, so there’s no market benchmark to work from.”
One of the operational staff opened a laptop and pulled up market data.
“If there’s no benchmark, we create one. What were the recent Lease Rates on the KAMCO Ship Fund vessels?”
“That fund was set up by the state, so the Lease Rates are inherently lower. We need to exceed that price.”
Another staff member laid out the cost structure.
“Starting with the seller’s side: Lay-up costs for seven vessels exceed six billion won monthly. Per vessel, eight to nine hundred million. Port fees, insurance, crew maintenance. This money bleeds out even while the ship sits idle.”
Min-jae jotted down the numbers. Eight hundred million per vessel meant five point six billion for seven ships. Fifty-six billion a month draining away while the ships went nowhere.
“If we convert to Sale and Leaseback, the seller eliminates ownership costs. Insurance, depreciation, management shift to us. They only pay pure Lease Rate.”
“From the seller’s perspective, if the Lease Rate is lower than current Lay-up costs?”
“It’s pure gain. Cheaper than letting the ships sit.”
“But we also have to account for our own retention costs. After acquisition, insurance, management, classification survey inspections. The Lease Rate must at minimum cover these, or we enter the red.”
“What’s the floor?”
“Based on calculations, we need five hundred million won per vessel per month.”
Five hundred million per vessel monthly as a Lease Rate—the minimum threshold to cover maintenance costs and eke out profit.
“If we want to retain more margin ourselves, we’d need six hundred million. But at that point, the other side will likely refuse. There’s no meaningful difference from direct ownership.”
“Let’s use four hundred million as our floor and move to term.”
Discussion shifted to duration.
“Three years or five? The longer, the better for us—stable income. The shorter, the better for the seller, who can renegotiate if the market recovers.”
“Five years fixed would be ideal, but they won’t accept less than three.”
Renewal terms. Auto-renewal or renegotiation? Fixed rate or market-linked? Opinions circulated among the staff.
Danny listened without interrupting. He didn’t resolve anything yet.
Min-jae scribbled notes while thinking. Fixed rate means our income is stable. When the market is bad, that’s good for us. But what if the market improves?
The discussion cycled around, reaching the wrap-up phase.
“Anything else to say?”
Min-jae, who’d been scribbling notes in thought, lifted his head at the sound of the voice. Danny and everyone else were looking at him.
“No, nothing.”
Min-jae didn’t want to stand out. He’d learned from online communities before landing this job what kind of scrutiny an intern faced if he made a splash. Keep quiet, stay unobtrusive at all costs.
“Come on, you’re clearly holding back. Your expression says so, and you were scribbling away so intently. Go ahead and say it.”
His heart raced. But there was something that had bothered him throughout the discussion.
Lee Min-jae hesitated briefly before speaking carefully.
“If we fix the Lease Rate, then later when freight rates recover, wouldn’t they essentially be using our ships cheaply?”
The conference room fell quiet. Min-jae continued.
“They operate on our vessel, generate freight revenue, but we only collect the fixed Lease Rate.”
The staff looked at him.
“That’s a fair point, but if we include a market-linked clause in the current environment, the other side gets cold feet. Fixed rates increase the odds of closing the deal.”
Danny looked at Min-jae. His expression was stern, but he soon smiled and nodded.
“Good point.”
There was no further explanation. Danny moved to the next agenda item, and Min-jae loosened his grip on the pen.

* * *
“Ugh, I’m dying. It’s such a tiny investment firm, but the workload is five times what it was in America. I feel like I’m going to drop.”
That afternoon, Danny came by the office. The moment he settled into a chair, he leaned back on the sofa and started groaning.
“You’re asking for more staff?”
“As fast as possible. With five people including an intern trying to run one deal, I’m working myself to death. I’m telling you.”
“That’s good, though. You’re quality talent, but sitting in the CEO chair and just coasting isn’t exactly ideal.”
At my words, Danny grimaced and shook his head.
“That’s not the issue. I’m involved in practically everything.”
“I’m joking. Jung is already talking to people. We’ll have ten bodies by end of month.”
“Thanks. Oh, that intern. Lee Min-jae.”
Danny straightened up as he spoke.
“He’s solid.”
“Min-jae?”
“Yeah. At the Lease Rate meeting, he was sitting in the back, but he piped up once, and there was real substance to it. He pointed out that if we fix the rate, wouldn’t the seller be the only one gaining once freight rates recover?”
“Really?”
Since our club days, he’d had an eye for catching the real point. To see that skill alive even in this internship felt gratifying.
“Groom him well. From what I’ve observed, he has this habit of poking at angles we’re not even thinking about.”
“Yeah, at first I thought it was pure nepotism, but now that I’ve seen him work, I think he’ll more than pull his weight, even if not quite a full share.”
Danny answered and straightened in his chair.
“Anyway, I didn’t come just for that. I’m here to report on the second meeting results. I presented every condition like Seon-woo directed.”
“What was their reaction?”
“At the end, when I mentioned leasing the ships back, they looked surprised, but since they said they’d report to head office and talk again, they obviously think it’s a good proposal.”
I nodded. Seonjin would be suspicious but accept it. The terms were too favorable to pass up.
A private investor offering the same terms as the KAMCO Ship Fund in this climate was an opportunity that wouldn’t come twice.
“They’ll probably accept it.”
“I think so too. Ultimately, the Lease Rate negotiation is what’s left.”
Danny pulled out documents.
“This is what came out of the internal meeting today. The operational team thinks five hundred million per vessel is the floor, six hundred million is likely rejection territory. Duration is between three and five years. One view was that fixed rates mean we lose if the market recovers.”
I took the papers, read them, set them down, and looked at Danny.
“Whether fixed or linked, if we haggle over Lease Rates line by line, we’ll just waste time. They have to report every number to their board, we have to calculate risks. Let’s change the negotiation approach.”
“Change the approach?”
“Yes. Let’s just set a floor for the Lease Rate—just enough to cover our vessel maintenance costs. How about we share the Revenue Share instead?”
Danny listened quietly.
“Seonjin Trading’s problem is clear: demand itself has contracted, so the ships are idle. There’s no guarantee the demand will return even if we lease them back. But what if we supply cargo volume ourselves? The ships operate, there’s freight revenue, and if we share that revenue, why would we quibble over Lease Rates?”
Danny worked it through.
“So we set the Lease Rate to a bare floor and move toward Revenue Share?”
“Exactly. That way, the issue Min-jae raised—that fixed rates could hurt us if the market revives—disappears.”
For DK, the fixed Lease Rate risk evaporates.
If the market recovers, Revenue Share climbs with it. And any asset appreciation in vessel values is a separate bonus.
“They won’t refuse… but where do we source the cargo? We’re an investment firm, not a shipper or freight forwarder.”
“There’s incoming raw material volume for Shinhwa Welltech from Japan. Our joint venture has raw materials too.”
I hadn’t overlooked this aspect.
“Yesterday I spoke with Ryan Holt from Volta Motors. He said they import batteries and various components and equipment from China. We route that through here.”
“You called Ryan?”
“I did. You thought I’d suggest this without a backup plan?”
“I didn’t mean that… but damn, you really are operating on a different level, Seon-woo.”
Danny leaned in with genuine interest.
“There’s also materials from Ochang Construction. Between overseas equipment and facilities alone, there’s substantial volume to source internationally. It’s short-term, but enough cargo to justify waiting.”
Danny calculated. Individually, these volumes were modest against major shipping lines. But bundled, they could fill a portion of the seven vessels.
“That works. Plus, consolidation from small-to-medium shippers. Set up a broker to bundle small export-import freight by container, and you can reliably fill Seonjin’s ships with steady volume.”
“Right. The CEO of Dongyang Trading—you said they’re brothers and a sister? That could be delegated to you.”
Danny nodded. DK was stepping beyond investment firm into an operational model. He’d never done it before, but structurally it was entirely feasible.
“Some within Seonjin’s board might push back on revenue sharing, but that’s not our problem—we’re just offering terms they can’t refuse.”
Danny nodded in agreement.
“There’s one more issue. To do Revenue Share, we’d need access to their books. Will they open them?”
“Seonjin Trading is audited by external accounting firms every year anyway. We just add one line to that process—Revenue Share settlement verification. We don’t need to see their books directly. The accounting firm reports the figures to us.”
With every assumption I raised dismantled, silence hung briefly.
“…Were you thinking about this from the start?”
I shrugged.
“Not from the very beginning. Once I decided we should propose Sale and Leaseback, I started working through this angle.”
“Impressive. Really. This way it’s not just us profiting, not just them profiting. It feels like a real deal.”
“Don’t rush. If they accept, we sign as is. If not, we just wait.”
No matter how much this deal had started as helping Seonjin Trading, there was no reason to go too easy on them.
“What if they find another buyer?”
“They won’t. Trust me—once the Dubai situation breaks, there’ll be even fewer buyers.”
“Works for me. Time’s on our side, so let’s go that route.”
At Danny’s answer, I nodded in agreement.

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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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