The Return of the Ruined Chaebol's Third-Generation Heir - Chapter 93

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

Regression of a Fallen Chaebol’s Third Generation — Episode 93
“All documents are prepared.”
Two days later, in the Seonjin Trading Company Meeting Room. Choi Dong-su nodded as he reviewed the documents while his staff reported.
-I’ll give you full authority in today’s negotiation.
In fact, before today’s negotiation, Kim Ja-young, the chairwoman of Seonjin Group, had ordered Choi Dong-su to reach a conclusion today.
Seonjin Trading Company had reached a point where it could barely hold on, and the matter had to be resolved before the shipping division’s crisis spread to other divisions.
Moments later, the meeting room door opened, and a familiar face entered.
“How have you been?”
It was Danny from DK Capital and his team. Choi Dong-su bowed and extended his hand for a handshake.
“Welcome.”
After exchanging handshakes and both sides took their seats, Danny spoke with a smile.
“These days I seem to see you more often than I see my own family.”
It was an attempt to break the tense atmosphere, but Choi Dong-su and his team’s faces remained rigid. Danny shrugged and continued.
“Today I’d like all our discussions to be finalized and for us to move into the implementation phase.”
“That’s what we’re hoping for.”
“Then shall we get straight to the point?”
Choi Dong-su pulled out the documents.
“I’ll present our conditions first.”
Charter fee, term, renewal.
He placed a table summarizing one page in front of Danny. By presenting conditions right from the start, it signaled they wouldn’t be dragged along by DK’s terms.
Danny received the document and read it.
“It’s a solid proposal. You’ve covered everything carefully.”
Danny set down the document and continued.
“However, we’ve prepared a somewhat different direction.”
DK’s staff handed over their proposal. Choi Dong-su took it and opened the first page.
“Regarding the charter fee, since both our proposal and Seonjin’s align, there’s no need to yield ground.”
Charter fee minimum: 400 million per vessel per month.
Above that, freight revenue would be distributed by percentage, and cargo supply would be provided through DK’s network.
His hand stopped.
…….
He turned the page.
Four hundred million per charter fee was a price that Seonjin itself had proposed while thinking it unfavorable to DK, yet the other side had written down the same figure…. It was cheaper than laying up a vessel.
Moreover, the revenue share wasn’t bad for Seonjin, and now they were offering to supply cargo as well?
No matter how he looked at it, the structure was favorable to Seonjin.
And that was Choi Dong-su’s concern.
“I have one question.”
Danny nodded at Choi Dong-su.
“What does DK gain from this structure?”
They’d buy vessels, receive only the baseline charter fee, and supply cargo on top of it. It was a question of why an investment firm would make such a proposal.
“It’s the vessel assets. We believe the vessel market will recover long-term. If we buy at the bottom now, when the market turns, we’ll make profit from asset value alone. The charter fee is merely a safety mechanism to cover holding costs until then.”
It was a textbook strategy for distressed asset investing—buy cheap in a crisis and wait.
Logically, it made sense.
But something didn’t sit right.
If they could just buy and wait, why supply cargo as well? These people knew Seonjin’s situation far too well.
“The revenue share is straightforward too. Since we won’t profit from the charter fee, we’re proposing to profit elsewhere. That proposal is hardly unfavorable to Seonjin either.”
He was right. You could only share revenue if the vessel was operating.
“Do you have a figure in mind for the revenue share ratio?”
“DK takes 20 percent of freight revenue. Seonjin gets 80 percent.”
“What’s the cargo supply period?”
“Identical to the charter contract term. We’ll secure a certain volume for three years.”
“Cargo might not arrive as promised.”
“If the minimum volume falls short, DK will make up the difference. We’ll add that to the contract.”
He jotted a note on the proposal with his pen.
“Furthermore, let’s do quarterly settlement. We’ll have an external accounting firm audit it. We won’t ask to open our books directly.”
He paused, then reviewed the proposal from the beginning again. Questions still lingered.
“Why did you decide to move forward with us?”
Choi Dong-su looked at Danny.
“The answer is simple. We can’t do anything alone.”
Danny spoke without embellishment.
“We’re an investment firm. We have no expertise in actually operating vessels. Seonjin Trading Company, which has that expertise, is what we need. This is a goodwill proposal born of necessity.”
Choi Dong-su didn’t respond.
“Mr. Choi, don’t overthink this. True, good proposals come with suspicion, but let’s be clear about whether your suspicion is truly about the terms, or simply because we’re a small, newly established investment firm.”
Danny had hit the mark. He was right. Had a major investment house made such a proposal, Choi Dong-su wouldn’t have hesitated.
“Please understand that our proposal stems not from goodwill but purely from DK’s needs.”
A proposal born of necessity.
The word “necessity” made sense. An investment firm couldn’t operate vessels directly. The suspicion hadn’t entirely cleared, but given the favorable numbers and consistent logic, there was no grounds to refuse based merely on a lingering doubt.
After a moment’s consideration, Choi Dong-su nodded.
“I’ll confirm the terms here today.”
Danny’s eyes brightened.
“I’ll accept all of DK Capital’s proposals. However, we’ll draw up the contract after board approval. How would it be to sign a Memorandum of Understanding one week after all necessary documents are prepared?”
At Choi Dong-su’s words, Danny glanced at his staff on either side, and they nodded.
Danny smiled slightly and looked at Choi Dong-su.
“Very well. Let’s proceed that way.”
With that, Danny extended his hand, and Choi Dong-su grasped it.

* * *
“Representative Choi Dong-su will report on the Seonjin Trading Company vessel sale matter.”
In the Seonjin Trading Company Board Room. Today, an extraordinary board meeting was being held to report on and finalize Seonjin Trading Company’s vessel sale.
At Kim Ja-young’s call, Choi Dong-su stood and stepped forward to begin his report.
“Over the past month, the Company’s Shipping Division has conducted negotiations with DK Capital, the acquiring party, regarding the vessel sale. The relevant negotiation details and the Memorandum of Understanding we’ve drafted are all documented in the materials before you, which I’d appreciate your review of.”
The board members were occupied reviewing the materials laid before them.
“Today’s agenda is approval of the final contract execution.”
They’d completed the MOU. Once the board approved, they could proceed directly to contract. Kim Ja-young scanned the directors’ faces.
“How high has the container spot freight rate climbed now?”
Then one director raised his hand.
“On the Europe route, it’s around 540 dollars per TEU.”
“It was 480 dollars in June. It’s risen 60 dollars in three months. The Baltic Dry Index is rising as well, and isn’t the entire shipping sector showing recovery?”
At that, another director nodded and spoke.
“If freight rates are rising, wouldn’t we profit by operating our own vessels directly? Is this the right time to sell?”
Choi Dong-su fielded the question.
“Our cost is 800 per TEU. At 540, we lose money every time we operate. Rates are rising, but not to profitable levels.”
The director hesitated. But he didn’t back down.
“The trend is what matters. Isn’t it rising?”
“According to our internal calculations, assuming rates continue rising as the trend suggests, it will take over a year to exceed our costs. We’ll continue losing money the entire time.”
Even with rising rates, each shipment still resulted in losses. Even if the company continued to hold the vessels, it would take over a year to recover everything—a timeline Seonjin Trading Company simply couldn’t sustain.
“Moreover, selling vessels now is about survival. We’re not liquidating all vessels; we’re restructuring seven ships to save the rest. I’d appreciate your understanding of that.”
At Choi Dong-su’s words, the director who’d raised the issue fell silent, but another director spoke up.
“I understood the Sale and Leaseback structure. It’s similar to the Kamco Vessel Fund structure. But what is this? Revenue share? Cargo supply? It’s not simple sales, it’s not a joint venture. The structure is too complicated.”
It was a fair question.
“It is complicated. But there’s a reason this structure is necessary.”
He paused to review the documents, then continued.
“Even with Sale and Leaseback, if there’s no cargo to load, it’s meaningless. Revenue share solves that problem. DK supplies cargo, we operate the vessels, we split the revenue. Because both sides move with the market, risk is distributed.”
“Splitting revenue. So how do you settle? We have to open our books every quarter?”
“An external accounting firm audits quarterly. DK won’t demand direct access to our books. It’s specified in the MOU.”
Another director interjected.
“What about cargo supply? You said DK supplies cargo, but where does an investment firm source cargo?”
Choi Dong-su stopped.
“They say it’s secured through DK’s network. Should the minimum volume fall short, there’s a clause for DK to compensate….”
“They say they’ll secure it? You’re signing an MOU while an investment firm claims to supply cargo and you don’t even know where it comes from?”
The atmosphere in the conference room shifted.
Choi Dong-su closed his mouth. Kim Ja-young was watching.
In truth, there was no need to know the cargo’s source. If they failed to deliver, DK would be the one suffering losses. But raising this objection was essentially a roundabout way of opposing it.
“I understand the structure is complicated. So let me ask—is there a simpler alternative?”
Kim Ja-young, who’d been observing, opened her mouth.
“As Representative Choi said, this structure is the only way to maintain the vessels while generating revenue.”
“Chairwoman, freight rates are rising. Why can’t we just operate directly? I don’t understand why we need to split revenue with an investment firm.”
“You’re taking us back to the beginning again. If we had cargo to transport now, we wouldn’t be in this situation.”
“That’s a sales issue, isn’t it? We’re a shipping company.”
Kim Ja-young closed her mouth firmly. When someone came prepared to object, there was no argument that could convince them.
Then Kim Seok-jun, who’d been listening, spoke up.
“DK Capital’s proposal itself isn’t bad. The structure is admittedly complex, but there are substantively favorable aspects for us. However, it’s difficult to pass a resolution here today. Let the Management Planning Division run simulations, and let’s reconvene in one week.”
The directors nodded. Even the opposition could accept a one-week delay.
“Very well. Representative Choi, please coordinate with the Management Planning Division to have simulations ready for the board meeting in one week, and request DK Capital provide a plan for how they’ll source cargo.”
“Yes, understood.”
After Choi Dong-su answered and bowed respectfully, Kim Ja-young rose from her seat with an exasperated expression and left the conference room, followed by the other directors.

* * *
“The situation in Greece is developing strangely.”
Han Jae-yi approached me with a serious expression, documents in hand. Recently, at my instruction, Han Jae-yi had been tracking global macroeconomic trends.
In truth, I knew that Dubai’s moratorium would hit around this time, but I couldn’t recall the exact date, so I’d tasked her with monitoring to minimize error.
“Let me see.”
I began reading the report Han Jae-yi had brought.
“The newly elected Greek Prime Minister made a shocking statement yesterday. He said the previous government falsified the budget deficit figures.”
It was accounting fraud at the national level. The budget deficit previously announced as 3.7 percent of GDP turned out to actually exceed 12.7 percent once the government changed.
“It seems they’d been hiding the deficit to qualify for the Eurozone.”
“How’s the CDS premium situation?”
“It’s starting to spike. We took positions last month as you predicted, and in just one day yesterday, our position gained 7 percent.”
A rising CDS premium meant Greece as a nation risked defaulting on its debt.
A month ago, knowing this would unfold, I’d instructed Han Jae-yi to purchase Greek CDS with some of Ribbon Capital’s investment assets.
Ding-dong—
While Han Jae-yi was still reporting, the office door opened and Danny walked in.
“Good mor—morning? Why do you all look so serious?”
As Danny Kim entered, he noticed mine and Han Jae-yi’s expressions and spoke with confusion.
“Jae-yi, is something wrong?”
Han Jae-yi gave Danny a full explanation as he took a seat.
“The situation’s serious. Are our investment assets okay?”
“Our US investment assets are sliding a bit, but we’re hedged because we entered Greek CDS positions early.”
“You bought Greek CDS?”
“Yes, on Kang Seon-woo’s instructions.”
At Han Jae-yi’s words, Danny looked at me.
“Did you call this one right too? Wait, doesn’t that mean Dubai’s actually going to have problems?”
Danny seemed to have been half-doubting my predictions until now. I understood. It would be hard to take at face value if someone suddenly told you a moratorium could hit Dubai.
“Not just Dubai. There will be systemic issues.”
…….
“European banks are holding most of Greece’s sovereign debt. What European banks have primarily done is invest in real estate in emerging markets like Dubai, or….”
“Ship financing.”
Danny finally grasped the whole picture.
“Exactly. If Greece’s problems drag on and worsen, they’ll inevitably try to recall capital. Not just from Greece, but from all risky debt.”
The situation was developing with increasing urgency.
“Let’s table this discussion for now. What did you come to tell me?”
…….
“Danny?”
“Ah! Sorry, I was just thinking about all the situations coming. I got too focused. What were you saying?”
“Didn’t you come to tell me something?”
At my words, Danny Kim nodded with an embarrassed expression.
“The Seonjin Trading Company board meeting didn’t go well. They’re going to run simulations both with and without our proposal and make the final decision in one week.”
I nodded. The Seonjin board’s position made sense. They’d want to approach this as conservatively as possible.
The container freight rates had clearly bottomed out and were rising. China was driving all the demand, and the atmosphere here in Korea, next door, was different from those European nations.
But my first thought was how hard Mother must be working.
“Also, they asked for a list of where we’ll source cargo. They seem to be looking down on us a bit just because we’re a new investment firm.”
“What would you like to do?”
“We have to provide it anyway.”
Danny grumbled, but he clearly understood what needed to be done now.
“All right then, I’ll put something together. Have you made contact with Oriental Trading? Even if it’s a small volume….”
Ding-ding—
Ding-ding—
Then, an urgent alert suddenly sounded in the office. It came from Han Jae-yi’s workstation. She rushed to check it, then looked up at Danny and me, her expression grave.
“Dubai has just announced a moratorium.”

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