The Magician’s Memorial - Chapter 345



Only Krnovel

345. The beginning of the revolution (4)

A few days after returning to Korea.

The planning director and Taewoo Engineering & Construction CEO Ahn Deok-hwan came to see me.

“We have completed the construction plan for a post-sale apartment.”

“It looks like it’s a plan created together with CEO Deok-Hwan Ahn.”

“This is a plan that not only I but all of Taewoo Engineering & Construction’s executives and employees worked together to create.”

President Ahn Deok-hwan’s face has aged a lot.

President Ahn Deok-hwan led Taewoo Engineering & Construction without any disruption for several years, and although he may be less capable than the presidents of other affiliates, there was no executive better than him in terms of stability.

“There are two locations in Seoul, one in Gyeonggi-do, and three in metropolitan cities. Hmm, isn’t that too passive? Considering Taewo Construction’s capabilities, isn’t it possible to construct more than 10 locations at the same time?”

“We have sufficient capabilities, but if we start too much construction at once, there may be holes in management and supervision. This year, we have planned to start construction in six locations and increase the number each year.”

A large construction company could actually be seen as a face-to-face role.

The actual construction was handled by local small and medium-sized construction companies, while large construction companies were only responsible for major construction or management supervision.

“Other construction companies were anxious because they could not receive orders, but Taewoo Engineering & Construction is in the opposite situation.”

“Of course, if we receive a lot of orders, we can increase sales, but in the long run, I think that building a sturdy and safe apartment will be more helpful in raising Taewo Construction’s image.”

“No matter how well you have done for 10 years, if one case of poor construction occurs, your brand image will fall into the abyss.”

It was President Ahn Deok-hwan who prioritized stability.

Although he was not suited to cases where an affiliated company needed to grow explosively, he was the most suitable leader for Taewoo Engineering & Construction, which needed stable growth.

“The situation in the construction industry is particularly bad. The unsold rate of large-scale apartments built by Dosan Construction in Ilsan is as high as 80%.”

“If the unsold housing rate is 80%, Dosan Construction will bear a loss of over 150 billion won.”

Dosan Group was a conglomerate ranked 12th in the business world.

Dosan Construction was also a healthy construction company, ranking 10th among construction companies.

Therefore, it had to be capable of sufficiently covering a loss of 150 billion won.

However, since Bankruptcy Group was currently suffering from fund liquidity problems, the loss of 150 billion won was felt greatly.

“Doosan Group’s unreasonable acquisition of the No. 1 construction machinery company in the U.S. has resulted in empty warehouses. Moreover, not only in Ilsan, but also in apartments to be completed in the future, there will be a series of unsold apartments, so Dosan Construction is shouldering a huge burden.”

“The company that Dosan Group acquired was Bumcat, right?”

“Excluding Taewoo Group, Dosan Group acquired Bumcat for 5 trillion won, the largest amount ever.”

Acquiring Bumcat wasn’t a bad decision.

However, the timing of the acquisition was a problem.

Bumcat was acquired just before the Lehman crisis broke out, and with the global financial crisis, Bumcat’s sales fell significantly.

“Is Bumcat still losing money?”

“It is expected that the situation will be better this year, but considering the deficit that has accumulated so far, it seems difficult to escape the liquidity crisis.”

It was a desirable item.

Currently, due to the financial liquidity crisis and the worsening construction economy, sales are not generating much.

I knew very well that this was a company that would serve as a cash cow for the Dosan Group in just a few years.

“Can you run Bumcat at Taewoo Construction?”

“What are you saying all of a sudden? Are you trying to bring Bumcat to Taewo Group?”

“Bumcat is a company that is essential for many businesses going forward. So, we should bring it.”

It wasn’t just something I said.

It was also because the value of Bumcat increased.

When the shale gas business begins in earnest, a large amount of construction machinery will be needed.

It wasn’t just shale gas.

Logistics, distribution, automation equipment, etc.

Small machines produced by Bumcat were available for use by many affiliates.

“The Dosan Group is shaken by the acquisition of Bumcat. Is there any reason for us to carry the burden for the Dosan Group?”

“Let’s think about it the other way around. By selling Bumcat, Dosan Group can solve its financial liquidity problem, and we can secure one more future source of income, so isn’t that a good thing? And if Taewo Group acquires Bumcat, the group will be shaken like Dosan Group. Isn’t it true?”

The planning director closed his mouth as if he agreed.

Normally, he would have criticized me even more, but he was reluctant to say anything because he knew roughly how much Taewoo Securities had earned due to the Japanese and European fiscal crises.

“I don’t think the acquisition of Bumcat is necessarily a bad thing. I once thought that it was necessary to own a construction machinery company. However, the acquisition of Bumcat could significantly reduce Taewoo Engineering & Construction’s operating profits.”

“We only have to work hard for 2-3 years. After that, Bumcat will serve as a reliable cash cow for Taewoo Engineering & Construction. We can’t be busy chasing orders forever.”

“If the Chairman makes a decision, I will trust it and follow it.”

Although President Ahn Deok-hwan considers stability a top priority.

He was a loyal executive who gave priority to my instructions.

It was a possible action because we had worked together on many projects since the 9/11 terrorist attacks and felt firsthand that my decisions were never wrong.

“Director, please arrange a table with Dosan Group Chairman Park Min-yong.”

“I have already been contacted a few times. And according to rumors, they are looking into several places to sell Bumcat.”

“That must mean that Dosan Group’s situation is not good. Just give them a little nudge, and they will contact you on their own.”

“In order not to rush, I will first spread the word just enough for Dosan Group to contact me.”

Acquisition of Bumcat.

This could be said to be part of preliminary work in preparation for the shale gas revolution.

The plan was to jump into the shale gas revolution in earnest as soon as the acquisition of Bumcat was completed.

* * *

A few days later.

The meeting with Park Min-yong, Chairman of Dosan Group, was held.

Thanks to the planning director’s good work, Dosan Group contacted me first, and we were able to meet at a restaurant that Chairman Park Min-yong usually frequents.

“Nice to meet you. My name is Minjae Kim from Taewoo Group. I have heard a lot about you from my grandfather. I should have seen you often and contacted you, but I am sorry for not being able to do so.”

“Hehe, Chairman Kim Tae-joong must be very reassuring. I am envious of his grandson who has grown up and is leading the Taewoo Group.”

Dosan Group has a deep history.

Since it was a company founded in the 1890s, its network of connections was wide, and Chairman Park Min-yong had quite a bit of interaction with his grandfather.

“I am very fortunate that the succession process for Dosan Group ended more quietly than for the current group.”

“Tsk, tsk, I don’t know if I should call that a good thing. How could it be that people of the same blood were fighting against each other so openly? I felt like I wanted to throw everything away and go into the mountains.”

Like all large conglomerates.

There was also a succession war for the Dosan Group, but at least it did not go to ruin because we knew what had become of the current group.

Instead, Dosan Group had a complicated shareholding structure.

There was talk that the company’s management had lost its focus.

“Still, the Dosan Group was able to survive thanks to the Chairman’s ability to stay focused.”

“If Dosan Group splits up, what kind of face will the elders see in the afterlife? Oh, I’m still worried. The situation at Dosan Construction is not good.”

“I think you are very worried about the construction industry.”

“Unsold units are pouring in one after another. Even though Dosan Group pours all the money it earns into Dosan Construction, instead of it being full of poison, it’s all leaking out through the hole.”

Chairman Park Min-yong talks freely about Dosan Construction, which can be said to be a shameful business.

Company presidents never revealed their weaknesses to each other.

However, the fact that they brought up the story of Dosan Construction first was no different from a signal asking for our help.

“There is a way that Taewoo Group can help. If you wish, we will solve the fundamental problem that caused Bankruptcy Group to experience a liquidity crisis.”

“If you say it is a fundamental crisis, do you mean that the problem of unsold apartments will be solved?”

“Isn’t the problem of unsold apartments ultimately aggravated by funding liquidity issues?”

“······It sounds like you’re offering to take over Bumcat.”

It was Chairman Park Min-yong who finally understood what I meant.

Well, you probably didn’t know that he would say he would take over a 5 trillion won company.

“I have always had a keen interest in the construction machinery field.”

“Huh, didn’t you sell all of the machinery-related companies that Taewo Group owned during the IMF period? I understand that you sold half of Taewo Heavy Industries to Hyunjae Group and the other half by forming a joint venture with Aramco.”

What year is it now? Are we talking about the IMF era?

Of course, at that time, they recklessly sold off affiliates to reduce debt, but since then, Taewo Group has continued to increase its size through mergers and acquisitions.

“I plan to acquire it because I think it will be of great help to Taewoo Engineering & Construction and Taewoo Motors.”

“Hmm, of course it’s construction, and since we also produce heavy equipment vehicles, it’s also connected to the automobile industry.”

“Of course, if the Dosan Group wants it, we will proceed with it. I do not want the Taewo Group to take the lead in the merger and acquisition.”

“What you’re saying is that if you force a merger or acquisition, the price will go up, so you don’t want to do that.”

There was nothing that could not force a merger or acquisition.

However, I did not want to do something troublesome like a forced merger or acquisition for a company that was continuously losing money.

To be precise, I was pretending that I didn’t want to do it.

“When we tried to sell Bumcat last year and the year before, no one was interested. But now that it’s starting to run properly, people are interested.”

“I am well aware that Bumcat’s sales have increased thanks to the Chairman’s excellent management skills. However, there is still a lot of debt remaining. Shouldn’t we have to choose between Dosan Construction and Bumcat to save one of them?”

Chairman Park Min-yong is troubled.

It would have been a waste to sell Bumcat, which had barely survived the difficult times, at this point.

If I had received an offer like this last year or the year before, I would have accepted it right away, but now I am worried because I can see the potential for growth.

“If the price is right, there’s nothing I can’t sell. So, how much are you considering?”

“We would like to acquire Bumcat for 5 trillion won, the same price that Dosan Group acquired it.”

“You’re playing with words. When we acquired Bumcat, the dollar exchange rate was 950 won, but now it’s well over 1,100 won.”

Even if it is the same 5 trillion won, its value changes depending on the time.

Since Bumcat was an American company, it was naturally Dosan Group that acquired it in dollars, but I tried to acquire Bumcat from Dosan Group in Korean won.

That’s why Chairman Park Min-yong complained that he was playing with words.

“5 trillion won is by no means a bad amount. The exchange rate is bound to fall again as the cycle goes on.”

“No matter what, we can’t sell it under those conditions.”

“The value of Bumcat predicted by the agency has fallen by about half in five years. Taking that into account, Taewo Group is offering a whopping 2.5 trillion won more premium.”

Bankruptcy Group was suffering from fund liquidity problems.

Therefore, we tried to secure cash somehow by listing Bumcat.

However, each time the company attempted to list its stock through an initial public offering, the company’s value was evaluated lower.

The one who is disappointed is not us, but Dosan Group.

So, there was no need for us to look after their situation, and we had to lead the situation so that Dosan Group would meet our conditions.