Let’s Work Together (2)
I repeated to Sara exactly what I had told Chairman Heo Seonghun and Heo Minwoong.
The hydrogen-car era would soon arrive in earnest, and at the center of it all was Nextrogen. In other words, its sales and profits were about to explode in the very near future.
“How much are you thinking?”
“Eighty billion dollars for a 51 percent stake.”
“……”
Sara looked completely at a loss for words.
Continue Capital had invested $10 million after the Thomas Motors fiasco and bought 60 percent of Nextrogen.
That meant I was effectively trying to sell it back for roughly ninety times what I’d paid, only a few months later.
Even I thought it was a little expensive after saying it out loud.
“And I’d also like another $2 billion injected into the company. A loan would be fine, or an equity investment.”
“Nextrogen hasn’t even built a single car yet.”
“That’s true.”
“Then how is this any different from Thomas Motors?”
“The difference is whether the technology is real.”
No matter how good a technology might be, you never knew whether it would actually make money until you tried. But I already knew the answer.
“So you’re valuing a company that still hasn’t built one car at around $16 billion.”
Well, Thomas Motors had once reached $40 billion. It was worth less than a tenth of that now, but still.
“If it reaches mass production, both sales and profits will grow explosively. I can promise you this much: within five years, its market cap will hit $200 billion.”
“You really think so?”
“If I didn’t have that kind of confidence, I wouldn’t have invested in the first place.”
Sara seemed a little stunned.
Of course, my words probably didn’t mean much to her yet.
After all, even Tisla, the current leader among electric vehicle makers, still hadn’t reached a $200 billion market cap.
So hearing that a hydrogen-car platform company with no vehicle on the road would eventually get there probably sounded absurd.
“If it’s such a good company, then why sell it?”
I shrugged.
“Because I need cash now.”
And more than that, this was the point where serious capital was needed for factory expansion, but Continue Capital didn’t currently have the room to make another large investment.
So bringing in a partner was the best move.
“Still, that price is too high. Adding future value to present value is a little much, don’t you think?”
“Sure, telling people to buy something expensive because it’ll rise later is exactly the kind of thing scammers say. But nothing I’ve told you has been a lie.”
“How am I supposed to believe that?”
A verbal guarantee meant nothing.
So I offered another condition.
“If there were no risk, wouldn’t it be worth investing?”
“What do you mean?”
When Sara heard the condition I laid out, her eyes widened.
“Is that really possible?”
“Yes.”
She fell silent for a moment, thinking it through.
“This isn’t something I can decide on my own.”
“I figured as much.”
But her opinion would still carry a great deal of weight. She was royalty, after all, and in a few years she would be heading the Saudi sovereign wealth fund.
“Discuss it and get back to me.”
Prince Rashid read through the investment report Continue Capital had sent him.
They had invested $300 million and, in just three months, turned it into roughly $2.2 billion. Considering the time frame, the return was astonishing.
In truth, the exact amount wasn’t what mattered.
For some people it was an enormous sum, but for him it was the kind of money he could take or leave.
Even if every penny had been lost and never recovered, he would probably have shrugged and said he’d simply bought a painting too dearly.
What mattered was the ability Miru had shown in the process.
He had exposed Ju Hyeon-jin’s verbal abuse and violence to turn public opinion, blocked the National Pension Service’s voting rights, brought in Hwaan Group to stop the rights offering, and at the final moment he had secured proxy votes and overturned the whole game.
He actually brought down one of Korea’s ten largest conglomerates.
Both his insight and his execution were far beyond ordinary people.
At this point, it was almost disappointing that he wasn’t Saudi.
Can I really leave him underneath me?
People in power tended to divide the world into two groups: those above them and those below them. Han Miru was neither.
He probably had no intention of working under anyone.
Still, we can work together.
Sara had relayed Miru’s proposal along with the report.
“HJ Pure Cell, huh…….”
Hydrogen was emerging as the energy source of the future, and Rashid had already been paying close attention to it. On top of that, a fuel-cell company for power plants had obvious ties to his smart city projects.
It might be worth acquiring now. The purchase price was only about $1 billion, after all.
The real issue was the second proposal.
“You want me to buy a stake in Nextrogen?”
[Yes. He asked for a 51 percent stake at an $8 billion valuation, plus another $2 billion investment.]
A full $10 billion.
At that level, it wasn’t A-Oil that needed to step in. It was Aramco or the Saudi sovereign wealth fund.
“Even if they begin mass production, there’s still no guarantee they’ll succeed, is there?”
[He said he was absolutely certain they would. That’s why I set a condition.]
“What condition?”
[He said he’d agree to a Put-Back Option.]
A put-back option was a clause in mergers and acquisitions under which the financial investor’s stake would be repurchased at a predetermined price on a predetermined date.
Since it was only an option, the investor could choose whether or not to exercise it.
“What’s the exercise price?”
[He proposed $16 billion three years from now.]
In other words, if the investment hadn’t more than doubled in three years, Continue Capital would buy the shares back at that price.
“Does Continue Capital even have that much money on hand?”
[He said that if we wanted, they’d secure 20 percent of Snow Crash as collateral for the put-back option.]
Snow Crash was already valued at $100 billion. A 20 percent stake was more than enough collateral.
So that’s how much confidence he has?
Given what he’d accomplished in such a short time, he certainly had reason to be confident.
[What should we do?]
“What do you think?”
[If we take the proposal as it stands, there’s really no downside.]
If Nextrogen’s value rose to more than double the purchase price, that would be great. If not, they could simply sell it back to Continue Capital.
And…….
Rashid murmured, almost to himself, “If Han Miru says it’ll work, then there’s no way it can fail.”
I stood by the window and looked down at Yuseong Town spread out below me.
The giant buildings lined up in neat rows looked like a kingdom unto themselves. For some reason, I felt like it would be satisfying to come to work every day and see a view like this.
When I turned my head, I saw a painting hanging on one wall.
“You hung it up here.”
It was the painting I’d given him.
The man sitting across from me asked, “I looked into it. It’s a Ranksy, isn’t it? How in the world did you get your hands on it?”
It was impressive that he’d figured that out. Had he sent it straight out for authentication?
“I bought it by chance in Central Park.”
Chairman Yoo Jae-ho laughed in disbelief.
“So the ‘Mister Han’ that Ranksy posted on social media was you, then. I knew you had an eye for companies, but I had no idea you had an eye for paintings as well.”
I waved a hand.
“I just got lucky.”
If he asked me to appraise art for him, I’d be in trouble.
To change the subject, I asked him, “How’s the atmosphere at Hanjeong Group?”
“I imagine it’s chaotic. Embezzlement, breach of trust, accounting fraud, funneling work to subsidiaries, and so on. There’s no shortage of material that needs to be cleaned up. The politicians who took money from them are probably panicking too, wondering whether the blast radius will reach them.”
Construction companies had always been a kind of illegal gift set.
Because contracts and permits were essential, they inevitably developed close ties with politicians and bureaucrats. And with more day laborers than salaried workers, it was easy to build slush funds, too.
Stuffing money into a fruit box and handing it over that way was the old method.
Nowadays, they usually set up subcontractors in relatives’ names or create paper companies and run transactions through them to receive the money.
If you only scratched that surface, the names of politicians from both parties would start spilling out in a long chain.
“I doubt it’ll go that far, though.”
Even if the professional manager backed by Kim Sung-gwun secured the records, there was no need to expose every request for favors and every bribe.
A knife was most dangerous before it was ever drawn, so they’d probably bury just enough of the mess and move on.
I drank my coffee and looked at Chairman Yoo Jae-ho.
We’d met a few times and spoken on the phone often enough, but sitting across from the head of Korea’s top conglomerate still felt strange.
There must be dozens, maybe hundreds, of people waiting in line for an audience with him.
“Ju Hyeon-jin has been arrested. Was this why you asked me if I knew any honest prosecutors?”
As if I had any personal connection to the prosecution or the police.
So I’d asked a favor from one place that could help.
Once the order came down from the prosecutor’s office, the narcotics team at the local police station moved in immediately and arrested Ju Hyeon-jin.
“Reporting crime is a citizen’s duty.”
If Hanjeong Group had still been standing on solid ground, the investigative authorities wouldn’t have moved so easily. But once he’d been thrown out of the group and had turned his back on his own family, there was no reason to protect him.
Chairman Yoo laughed out loud.
“By now he’s probably regretting that he picked the wrong person to mess with.”
“No doubt.”
By now he was probably in detention, spending every spare moment cursing my name.
People don’t change that easily.
“Ah! I should thank you. We were able to make money thanks to what you told us.”
“It was nothing. I got a huge help too.”
For all I knew, they’d more than doubled their money.
The proxy votes he’d handed over had been enormously helpful at the shareholders’ meeting.
Suddenly, I became curious about the scale of Yuseong Group’s slush funds. They’d had three generations to build them, and over time they’d surely inflated them through every method imaginable.
Investing could succeed or fail, but at the scale of Yuseong Group, the story was different.
That was because they could become a price-maker in their own right. If they announced they were building a factory or a building, the surrounding land prices would jump. If they entered a new business, the share prices of related companies would swing wildly.
On top of that, they could collect every development plan and government policy in the country. Just buying and selling at the right time was enough to make two or three times your money without breaking a sweat.
His official fortune was around 20 trillion won. Add the slush funds on top of that, and who knew how much he really had?
“What do you think about this incident, Chairman?”
“In the sense that it served as a warning against the reckless management of chaebols, I think it was a good thing. Though I do worry a little that the chaebol system itself may be shaken.”
In South Korea, hereditary management by conglomerates was accepted as something perfectly natural.
Even right now, the articles in the papers were full of lines like, “They’ve had their management rights stolen” or “How can it be right to be driven out of your own company?”
That was because they treated the group as the property of the chaebol family.
Even with Yuseong Group, it was hard to imagine anyone other than Yoo Jae-ho running it.
“But why did you help me?”
If Yuseong Group had stepped in to support Hanjeong Group, there would have been no way I could have won the shareholders’ meeting. But instead, he had helped me by transferring the voting rights for shares bought with slush funds.
“Hanjeong Group doesn’t really help Yuseong. But you helped me quite a lot, Miru. Vice Chairman Kwon Hyeok-jun told me that even Dongwoo Precision alone is worth over 100 trillion won.”
He’d seen it correctly, as expected.
If Dongwoo Precision had fallen into China’s hands, the damages and royalties alone would have exceeded 50 trillion won.
And on top of that, we’d opened the path to independently developing lithography equipment. That alone was worth another 50 trillion won, at least.
“We also finished acquiring AD Quanet and NP Semi. We bought 15 percent of ADM as well.”
The acquisition of AD Quanet cost $1.6 billion, NP Semi cost $3.5 billion, and the ADM stake another $2 billion.
It was the largest M&A deal Yuseong Electronics had carried out since acquiring CARMEN.
Once Yuseong Electronics made its move, the private equity funds that had been planning to exit through an IPO were happy to sell their stakes.