Let's Join Forces (1)
I was sitting in a cafe, reading the articles and comments as they came in, when my phone rang.
“Hello?”
[Hey, brother.]
If anyone heard that, they’d think he was my real older brother.
“What’s up?”
[Nothing much. Oh! Did you see the article about Ju Hyeon-jin?]
“I’m looking at it right now.”
[I had a feeling something was off about that guy, but I didn’t know he was on drugs too. Tsk tsk.]
I answered as if it were no big deal.
“Yeah. I was surprised too.”
Clearly, Ju Hyeon-jin was the last thing on Heo Min-woong’s mind, because he quickly got to the point.
[About HJW Energy, though.]
“What about it?”
[It’ll really be okay to acquire it?]
“Of course.”
The collapse of Hanjeong Group was both a crisis and an opportunity.
The chaebol groups with any sense at all were already analyzing how this would ripple through the entire industrial landscape and scrambling to prepare a response.
The fastest mover of them all was Hwaan Group.
On the surface, they were pretending to focus on acquiring Daejun Construction, but in reality they were already assembling a team to take over HJW Energy and working with the financial sector to line up the funding.
[The losses are pretty heavy. And wind power isn’t exactly a high-margin business.]
“But the assets aren’t small either.”
Wind power still wasn’t all that profitable, which meant quarterly losses were piling up, and the debt load was substantial.
Even so, the assets were still worth more than the liabilities.
The reason was simple: like every other Hanjeong affiliate, the company had bought land first whenever it had money. That meant the actual business had always been pushed to the back burner.
“If someone acquires it, sells off the unused land first, and uses that money to invest in facilities, they could cut costs dramatically.”
[I hear A-Oil is going to acquire HJ Purecell?]
“That’s something we’ll have to talk about from here on out.”
[So it’s not certain yet.]
A-Oil’s largest shareholder was Aramco, and Aramco was a state-owned company of Saudi Arabia.
The simple fact that Saudi Arabia was investing would make the hydrogen energy industry worth paying attention to. That would soften shareholder resistance and make the funding much easier to secure.
“You think I’m lying to you?”
At my words, Heo Min-woong practically jumped in protest.
[What are you talking about? Of course I trust you, brother. There’s nobody who trusts you more than I do.]
“Then keep holding on to that faith.”
[You got it, you got it.]
“So how did that thing I mentioned turn out?”
Heo Min-woong, who must have been nodding emphatically even though I couldn’t see him, said as if he’d just remembered.
[Ah! Right. I called to tell you about that. There’s a company called Taeyong Industries, and I’ve set aside a position there for you. You can start next month. If you contact them, they’ll give you the full details.]
“Thanks.”
[Heh! No need to thank me for something like that, brother.]
“…….”
What exactly were we to each other, anyway?
I hung up with Heo Min-woong, then called someone else.
“Hello.”
Kim Seung-do, Ju Hyeon-jin’s former chauffeur.
After the brief greetings were exchanged, he spoke.
[I watched the shareholder meeting results. You really pulled it off.]
His voice was calm, without much emotion.
“I told you back then that I’d make sure it was finished.”
He had released the recording once before, during the first round.
But it hadn’t done much damage to Ju Hyeon-jin, and instead Kim Seung-do had been buried under a storm of criticism and had to disappear.
This time, though, the outcome was completely different.
His recording became the decisive spark that brought down Hanjeong Group.
Ju Hyeon-jin’s abuse and foul-mouthed threats had enraged the public, and that alone was enough to poison opinion against Hanjeong Group. On top of that, his offhand mention of a “VIP” became the basis for the bribery case involving the name-lending foundation.
And then, cornered, Ju Hyeon-jin betrayed his older brother.
“It was all thanks to you finding the courage to speak up, Mr. Kim.”
[Ah, n-no. I barely did anything at all.]
“Now that your new job has been arranged too, get some rest. You can start next month.”
The truth was that whistleblowers, no matter how much good they did, had a hard time getting hired again. I knew that better than anyone.
So I’d asked Heo Min-woong to find him a job.
He’d introduced a subcontractor of Hwaan Energy. From what I’d gathered, it was a company founded by an executive who had originally worked for Hanjeong Group before retiring.
That was how thorough my follow-up was.
[Thank you so much.]
“It’s nothing.”
I was the one who should be thanking him.
By the time the conversation ended, a foreign woman had approached and taken the seat across from me.
I greeted her and ended the call.
“Did I interrupt you while you were on the phone?”
“Not at all. I was about to hang up anyway.”
I slid over the report that Dong-ho had prepared.
We had invested 330 billion won and earned 2.5 trillion won.
Of that, Prince Rashid’s investment had been about 165 billion won.
That money had generated 1.085 trillion won, and of that, 70 percent belonged to Continue Capital, while the remaining 30 percent—about 325 billion won—was Prince Rashid’s share.
Sara couldn’t hide her astonishment as she looked over the report.
“To earn this much in just a few months... Prince Rashid will be more than pleased.”
“I’m glad to hear that.”
Even so, that kind of money wasn’t really a huge sum to Prince Rashid.
For someone who effectively held an entire country in his hands, a few hundred billion won was probably neither here nor there.
“The reason I asked to meet you today, though, is because I have two proposals for you.”
“I thought as much. What sort of proposals?”
I’d already promised Representative Kim Sung-gwun that I would help sell Hanjeong Mulsan’s stakes in HJW Energy and HJ Purecell.
HJW Energy was already being prepared for acquisition by Hwaan Group.
That left HJ Purecell.
I handed over the materials. Kim Beom-seok had put them together. For a first attempt, the organization was remarkably neat and clean.
She looked over the documents.
“These are about HJ Purecell. Why are you showing me this?”
“Hanjeong Mulsan is the majority shareholder, with a 36 percent stake in HJ Purecell. I was wondering what you’d think about A-Oil acquiring it.”
It must have come out of nowhere, because her reaction was one of mild surprise.
“A fuel cell company and an oil refiner don’t really seem all that connected, do they?”
“They do have one thing in common: they both deal with energy. In fact, because it has nothing to do with oil, there’s even more reason to invest.”
As the name suggested, HJ Purecell was a company that developed and produced fuel cells for power generation, and also built, maintained, and serviced fuel cell power plants.
“What kind of acquisition price are you expecting?”
“Around 36,000 won per share should be a fair estimate.”
“The current market price is only 18,000 won.”
“There’s something called a control premium.”
“Even accounting for that, isn’t it too expensive?”
“As you can see, just the land they bought all over the country for factory sites is worth a fortune. Even if you acquire it, you won’t lose money. And if A-Oil steps in with an investment announcement, the stock price will shoot past that immediately.”
HJ Purecell had been trapped inside Hanjeong Group without ever receiving proper investment.
In a situation like that, if A-Oil announced it was going to acquire the company and invest in it, both employees and shareholders would welcome it with open arms.
Aramco might be the largest shareholder, but at the end of the day, A-Oil was still a Korean company.
If a Korean company stepped up to acquire it and invest in it, there would be no real reason for politicians or the business establishment to oppose it.
“After you acquire the stake, you can increase your holding through a rights offering. You could raise it to fifty percent, maybe even seventy if needed. There’ll be a need for that much new investment anyway.”
When a company issues new shares, the increase in share count often acts as a negative pressure on the stock price. But if a parent company with massive capital declares that it will invest in earnest, that is a clear positive catalyst. So the backlash shouldn’t be too severe.
“Once hydrogen production ramps up, demand for fuel cells that run on hydrogen is going to explode. HJ Purecell has pretty solid technology in that field.”
In fact, ten years from now, HJ Purecell’s market cap would grow more than thirtyfold, to 50 trillion won.
So then, had Hanjeong Group benefited from that in the first timeline?
Unfortunately, no.
Vice Chairman Ju Cheol-jin ran the company into the ground, and the group fell into a liquidity crisis. To pay down its debt, both HJW Energy and HJ Purecell were sold off to foreign buyers.
The company that bought HJ Purecell was a Chinese state-owned oil company. The stock had surged right after the sale, so Hanjeong had done nothing but hand the profit to someone else.
“Was there really that much demand?”
“That may be true now, but in the future, everything will be digital.”
Computers, smartphones, tablets, and everything else.
All human activity would be handled digitally—more precisely, in the cloud. And that trend was only accelerating.
What did that mean?
It meant only one thing.
“In just ten years, electricity demand will be three or four times higher than it is now. We’ll need to produce far more power, but since every country has agreed to reduce carbon emissions, expanding thermal power plants is going to be difficult.”
“That’s why everyone’s expanding renewables.”
“Renewables eventually lead to hydrogen.”
“So you’re saying we should buy a company that makes hydrogen fuel cells?”
I nodded.
“Hydrogen power plants are going to change the very concept of a power plant.”
“How so?”
“The places that consume the most electricity are cities. But power plants themselves are always built far away from cities.”
Thermal power plants had to be kept away because of harmful emissions, and nuclear plants because of the need for water and the risks involved.
The same was true for other kinds of renewable energy.
Solar power required an enormous amount of land, and wind power created massive noise.
But what if the plant ran on fuel cells?
Since it produced electricity from hydrogen, it emitted no smoke, no carbon, and no noise.
That was why hydrogen power plants were generally built inside cities. And because they could be expanded in step with rising demand, additional units could be built whenever needed.
That alone was significant enough to change the entire paradigm of urban planning.
“I know Saudi Arabia has a smart-city project in the works.”
It was to be located along the Red Sea and the Gulf of Aqaba.
The site was a transportation crossroads linking Jordan to the east and Egypt to the west, and unlike a desert climate, it had a mild average annual temperature of 30 degrees Celsius.
It would stretch about 450 kilometers, cover roughly 25,000 square kilometers, and cost an astonishing 500 billion dollars to build.
The project was called NEOM.
It was only in the planning stage for now, but after Rashid became crown prince, construction would actually begin.
The city’s energy was planned to come 100 percent from renewables like solar and wind.
But there was no concrete plan for how they intended to supply electricity to a smart city forty times larger than Seoul using renewables alone.
“Are you saying the smart city’s power should come from hydrogen plants?”
“It’d be hard to cover everything with hydrogen alone, so they’d probably need nuclear plants too.”
After reviewing the materials for a while, Sara nodded slowly.
“I’ll look into it.”
Saudi Arabia had shown enormous interest in renewable energy, and in just a few years it would begin investing heavily in the hydrogen energy sector.
It would do so by partnering with Song Gazuki of Softbox Group through the Insight Fund.
So the odds of her accepting this proposal were high.
“What’s the other proposal?”
I handed over another set of documents.
When she saw them, she asked, “Nextrogen?”
These were materials on Nextrogen, prepared by the headquarters.
“Yes. As the documents show, it’s a company that builds hydrogen truck platforms. How would you feel about acquiring a stake in it?”
According to the agreement, Continue Capital had to pay 8 billion dollars within six months.
Three months had already passed since the contract was signed, but all I’d managed to raise so far was only about 2 billion dollars.
Which meant I couldn’t exactly go selling off my Snow Crash stake.
Fortunately, there was one stake I could sell.
Nextrogen.