Divide and Acquire
A week later, at Kim Seok-jun's home in Seongbuk-dong.
"Yes, I heard it from Director Jung. So a decent company has come up for sale?"
Kim Seok-jun set down his teacup and studied me. Beside him, Director Jung Tae-sung sat in attendance with impeccable posture.
"Yes. It's called Shinhwa Weltech — a precision chemical company based in Ulsan. Their technology is beyond question."
I gestured toward the briefing materials Jung Tae-sung had prepared and walked him through the details: the semiconductor cleaning solution purification technology, the operating permits, the expansive factory grounds.
Kim Seok-jun nodded along until his finger stopped on the financial statements page.
"The technology's good, but the situation is grim. Thirty billion won in debt, and the creditors' syndicate wants sixty billion for the sale."
He clicked his tongue.
"If they're demanding sixty billion, then even emptying every last bit of our cash wouldn't cover it."
"And if we did pay that much, we'd have nothing left to operate the company with. The acquisition would be dead on arrival."
"So is there another way? What about lowering your sights? Find something cheaper, even if the technology is a notch below. There has to be something out there."
It was a reasonable suggestion. An overreaching acquisition invites the winner's curse, after all. But I shook my head firmly.
"No, sir. There's nothing else like it. And there's a way to acquire it without spending the full fifty billion."
"I'm listening."
Kim Seok-jun leaned forward, his interest clearly piqued.
"We negotiate with each party separately."
"Separately?"
"Yes. Right now the creditors — the bank, the suppliers, and management — have banded together and are demanding a package deal. Sixty billion is the price at which all three would be fully satisfied. But if you seat all three at one table and negotiate as a group, it'll never close. None of them will yield an inch to the others."
I held up three fingers.
"So we split them apart. Their desires and their fears are not the same."
I folded down the first finger.
"Stage one: we assume the bank debt of twenty billion."
"Assume the debt, eh."
"There's no need to hand the bank twenty billion in cash right now. They're holding the factory and equipment as collateral anyway. If I, as the new owner, offer to take responsibility for repaying that debt, they have no reason to refuse."
From the bank's perspective, they couldn't even recover the principal as things stood.
"The bank has almost certainly already classified Shinhwa Weltech's loans as non-performing. The moment the company files for rehabilitation, their principal is gone."
If the interest payments simply kept arriving on schedule, keeping the loan alive was in their interest. Pushing the company into court receivership and dragging through auction proceedings would only lengthen the recovery timeline and multiply the headaches.
"With a debt assumption structure, the cash leaving my pocket and going to the bank today is exactly zero won."
Kim Seok-jun nodded.
"There's logic to that. The bank will be desperate for a safe new owner to appear. What about the unsecured claims, then?"
I folded the second finger.
"Stage two: we buy out the ten billion in unsecured debt at a fire-sale price."
"Fire-sale price?"
"Yes. We'll approach the suppliers directly. They hold no collateral, so if the company goes under, their ten billion evaporates. They're the ones trembling in the most fear."
My voice turned cold.
"We'll tell them this: 'If the company goes into court receivership, your money becomes scraps of paper. I'll pay you fifty percent in cash, right now — hand over your claims.'"
"Hmm..."
"Recovering five billion beats receiving zero tomorrow. The remaining five billion, they collect once the company is back on its feet. If I promise to become the new owner and keep giving them business, they'll welcome me with open arms."
Done this way, a ten-billion-won debt on the books could be wiped out for five billion in cash.
"And the final stage three: we take management control for free."
"You mean the founder?"
"Yes. Our offer will be this: I assume the bank debt and clear out the supplier obligations too, freeing him from the debt collectors entirely. In exchange, he hands over management control."
I folded the last finger.
"The company as it stands can't even pay salaries, let alone fund R&D. The man is obsessed with research. Guarantee him the CTO position and promise research funding, and he'll surrender management control without a flicker of regret. Ten to fifteen billion out of our budget to buy out the existing equity is more than enough."
"Hold on. Is that why you told me to find someone interested in the technology rather than running a business?"
"That's right."
"Ha! Those strange creatures really do exist, don't they. Buying shares of a collapsing company for fifteen billion and letting him keep doing his research. A strange creature who'd find that an attractive offer."
"And because that strange creature is someone we need as well, if the deal goes through, we'd be wise to attach a clause requiring him to stay with the company for the next ten years."
The moment my explanation ended, Jung Tae-sung turned to stare at me with wide eyes.
The total acquisition cost: roughly twenty billion won in cash. The remaining thirty billion could flow straight into operating capital and R&D.
"Well, I'll be damned."
Kim Seok-jun stroked his chin in admiration.
"The plan is elegant. But will it actually work? You think they'll split apart that easily?"
"If you'll recall the report, this company collapsed two months ago. That's when it surfaced as a sale listing, too. And in all that time, not a single prospective buyer has appeared."
My voice rang with certainty.
"Time is on my side. If next month's lease payment goes unpaid, the company goes into default. That is the strongest card I hold at the negotiating table."
"So the message is: accept my terms now, or we all die together next month."
"Exactly. 'Refuse to sell now, and you go into court receivership — and then I'll scoop you up at auction for pennies.' That's my pressure strategy."
It looked like a hard boulder worth sixty billion, but in truth it was a sandcastle riddled with cracks.
Pry into those cracks, split it apart, and each fragment would come over at a far cheaper price.
A deep smile spread across Kim Seok-jun's face.
"Vicious. Utterly vicious. Not the kind of strategy that comes out of a high schooler's mouth."
"I'll take that as a compliment."
"But what if it fails? What if they hold the line at sixty billion to the very end?"
I shrugged.
"Then I let them march straight into court receivership, just as I said."
"..."
"Once it hits auction, a bid somewhere in the thirty-to-forty billion range should win it. It would cost more than splitting the creditors does now, but I could still close it inside fifty."
Kim Seok-jun laughed out loud.
"Hahaha! You've sealed off every escape route. You're right, then. The ones who should be anxious are them, not you."
I nodded at his words and turned to Jung Tae-sung.
"Director Jung."
"Yes, sir."
"You'll need to start with the bank. Settle with the bank and the unsecured creditors first, then move on to negotiating for management control. That's the proper sequence."
I couldn't move in person, so from this point on, it was Jung Tae-sung's time to act.
"I'll make the preparations."
"I'll have the plan properly documented and sent to you. There can be no mistakes."
"It will be handled flawlessly."
As Jung Tae-sung bowed his head, Kim Seok-jun spoke up as well.
"Feel free to trade on my name when you meet the bank. They'll assume it's my family office anyway."
Perfect.
Every detail had been arranged. All that remained was to watch and see whether the arrow, once it left my hand, would fly true.
The CEO's office at Shinhwa Weltech.
Park Jin-hyuk clutched the sweat-damp telephone receiver like a lifeline.
"CEO Seo, I'm begging you. Just ten billion won. If you can only front me ten billion for raw materials right now, I can put out the fire and get the factory running again immediately."
Park Jin-hyuk's voice had slid past pleading into something close to groveling. The response on the other end of the line was ice-cold.
"CEO Park, do you take us for fools who don't know how things work in your industry? We all know the semiconductor side isn't paying these days. What good is running the factory? Do you even have a buyer lined up for the product?"
"I'm looking for one right now! You know our technology. Once we break into the vendor networks at Taesan Electronics or Hanseong Semiconductor—"
"Then call me once you've broken in. We're hardly flush enough to bury money in a maybe."
Click. Click. Click.
The line went dead without ceremony.
Park Jin-hyuk lowered the receiver, hollow-eyed. That made ten rejections.
"...Haaah."
A deep sigh escaped him unbidden.
"No luck this time either, sir?"
The CFO, who had been waiting nearby in an agony of suspense, asked carefully. Park Jin-hyuk didn't answer; he simply dropped his head.
Disappointment and fear swept across the CFO's face in the same instant.
"Sir, we can't hold out any longer."
"..."
"The leasing company called — if we don't transfer the lease payment today, they're coming for the equipment. And the suppliers are in open revolt. They have their own payrolls to meet. The calls demanding payment are coming in like machine-gun fire."
Park Jin-hyuk rubbed his face with a dry, humorless hand.
It wasn't only the suppliers who were desperate. Shinhwa Weltech's own employees were two months behind on their wages.
You could see the research staff growing restless with your own eyes.
If it stops here, it's over.
Everything — all the years of time and passion he had poured into this place — would dissolve into foam.
Just a little longer. If he could endure just a little longer, they would see the light. And it was money, damn it, money alone that had them by the throat.
"...One more day. Let's stall for just one more day."
"Sir."
"I'll keep working the phones somehow. I'll swallow my pride and call everyone I know. So please, Director — call the leasing company one more time and ask for their patience."
The CFO bit his lip.
He knew there was no hope. But the look in his CEO's eyes was too desperate to refuse. With a resigned nod, he gave in.
"...Understood. I'll do what I can."
Once the CFO shuffled out, Park Jin-hyuk leaned his head back against the chair.
The ceiling seemed to spin.
Who do I call next?
Pride had been discarded long ago. But no matter how many times he scrolled through his contacts, no name that would actually lend him money appeared.
And still — he couldn't stop.
With trembling hands, he reached for the phone again.
Knock knock—
At the sound of the knock, he looked up.
"Come in."
The door opened and his secretary entered. Her expression was every bit as grim as his own.
"Sir, there's a call from outside. Shall I put it through?"
"A call? From whom?"
"A company in Seoul called SJ Holdings."
Park Jin-hyuk's brow furrowed.
SJ Holdings? The name meant nothing to him.
"What's it regarding?"
"They... would only say that they need to speak with you directly, sir."
Park Jin-hyuk gave a bitter laugh.
A debt collector.
So the bank or the suppliers had sold their claims off to a loan shark or a professional recovery firm. SJ Holdings — grand name and all, it was surely just another collection outfit.
But there was no hiding from it. Debts came around eventually, no matter how long they circled.
"Put it through."
A moment later, the phone on his desk rang.
Park Jin-hyuk took one long, steadying breath and picked up the receiver.
He braced himself for an earful of abuse.
"This is Park Jin-hyuk."
"Good afternoon. My name is Jung Tae-sung, Director at SJ Holdings."
The voice on the line was unexpectedly courteous and calm.
Not the gravelly rasp of a loan shark at all.
Still, Park Jin-hyuk did not let his guard down. He'd watched too many smooth talkers turn into animals the moment money entered the conversation.
"If this is about our outstanding debts, we're working on a resolution as we speak. If you could just give us one more day—"
"Ah, no. That's not why I'm calling."
The man cut him off smoothly.
"We are not calling to demand repayment. We have a proposal for you."
"A proposal?"
"Yes. We would like to acquire management control of Shinhwa Weltech."
Park Jin-hyuk doubted his own ears.
"...I'm sorry?"
"To be precise: we wish to purchase the Shinhwa Weltech shares currently held by you, CEO Park Jin-hyuk."
In that instant, Park Jin-hyuk's mind went completely white.
Not a demand for repayment — an offer to buy the company?
This company — the one falling apart before his eyes?