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CH430 | Heir
🕑 Added 2025-09-16 14:37:39 +0000 UTCThe shipping companies’ debts totalled around 8 trillion won.
The creditors had three options to choose from.
The most extreme option was bankruptcy.
After bankruptcy, the creditors would divide the company’s sold assets among themselves. Using this method, they often couldn’t even recover 50% of the principal.
The second option was for the creditors to directly manage the shipping companies.
By increasing the companies’ value, they could sell them for at least the principal or more and earn a profit.
But this method carried enormous risk.
Raising the company’s value required further investment, and instead of reducing the debt, the total liabilities could even increase.
The last option, naturally, was a sale.
For a sale to be possible, the creditors would have to forgive a portion of the debt.
If there were many bidders, competition could drive up the price. But nobody wanted to buy shipping companies that suffered annual losses in the trillions.
Lee Myung-geol, chairman of the Industrial Bank and representative of the creditors, chose the last option.
After a brief pause, he announced the sale terms and the debt forgiveness ratio.
“I want to proceed with the sale of the shipping companies under the condition that 10% of the debt is forgiven,” he said.
“Does that 10% exclude the personal contributions of the shipping company management?”
“No. We will forgive 10% of the 8 trillion won debt, which amounts to roughly 800 billion won. You can acquire the shipping companies after subtracting the management’s personal contributions from the forgiven debt,” he clarified.
It wasn’t a bad condition.
Including the creditors’ debt forgiveness and the management’s personal contributions, it would save nearly 1 trillion won.
But it was still slightly disappointing.
So, instead of addressing Lee Myung-geol, I directed my question to the shipping company executives.
“I understand that the shipping companies’ self-rescue plans included a clause for renegotiating charter fees. I’d like to know how far those negotiations have progressed,” I asked.
“……We’ve agreed to a 15% discount. With further negotiation, we might be able to secure up to a 20% discount,” came the response.
“Hyunjin Shipping is under the same condition,” another executive added.
The biggest obstacle in acquiring the shipping companies was the charter fees.
When the topic of charter fees came up, not only did the executives frown, but even the creditors looked displeased.
“The charter fees are honestly exorbitant—set at ten times the Hyundai market rate. If we acquire the shipping companies, Taewoo Group will have to cover these tenfold fees,” one said.
“Hmm, if Chairman Kim personally negotiates, couldn’t you get a slightly higher discount?” someone suggested.
“Honestly, I’m not looking to make a profit from acquiring these shipping companies. I am considering the acquisition to ensure that exports from Taewoo Group and other Korean companies are not disrupted,” I explained.
“You’ve made an extremely difficult choice for the sake of Korea’s economic development. Not as the chairman of the Industrial Bank, but as a citizen, I thank you for your decision,” said one of the executives.
Everyone agreed with my statement.
Given the high charter fees and the shipping industry’s ongoing slump, no one believed the shipping companies could turn a profit.
Acquiring the companies now was nearly a mad endeavor, which meant I held the initiative.
“If we acquire both shipping companies, we will face annual losses in the trillions. Even so, I intend to hold onto the companies until the end,” I said firmly.
“In recognition of Taewoo Group’s noble intentions, we will increase the debt forgiveness to 15%,” Lee Myung-geol announced.
Only 15%?
I realized I would have to bring up the point I had been holding back.
“In the event Hyunjin Shipping goes bankrupt, its liquidation value is roughly 2 trillion won. If Taewoo Group purchases all the assets post-bankruptcy, we could save that amount. The same applies to Hyundai Shipping, doesn’t it?”
“There are no definite decisions regarding the bankruptcy of these shipping companies yet. Your proposal is too extreme,” Chairman Lee replied.
He wasn’t wrong.
The Blue House, which had pushed for Hyunjin Shipping’s bankruptcy, was no longer in power.
So if the companies entered court-managed administration, whether they would actually go bankrupt remained uncertain.
That said, there was still a possibility the shipping companies might not go bankrupt.
“I know it’s an extreme opinion. But the creditors’ conditions are also excessive. We cannot pay twice the liquidation value,” I argued.
“……Please give me a moment,” Chairman Lee said.
Chairman Lee Myung-geol gathered the creditors for a meeting.
They tapped calculators and jotted numbers into notebooks, discussing among themselves before finally presenting me with a new proposal.
“We’ll increase the discount to 20%. Beyond that, it’s truly impossible for us. Unless bankruptcy were already certain, 20% is the best we can do under the Hyundai circumstances,” they said.
“You’re saying you’ll forgive 1.6 trillion won in debt,” I noted.
Given these conditions, it wasn’t actually a bad deal.
The shipping industry’s slump would soon end, and with the arrival of the post-COVID era, the shipping companies would generate enormous profits.
They would earn enough to cover past losses and then some.
So acquiring both shipping companies for around 6.4 trillion won would still be profitable.
“Understood. We will sign the sale agreement for the shipping companies under these terms. The management’s personal contributions will be specified in a separate contract,” I confirmed.
“Thanks to your decision, Korea’s shipping industry can recover. We sincerely appreciate it,” the enTyre creditors’ consortium said, rising to bow slightly.
It was natural for them to feel pleased after offloading all the bad debts.
Of course, there seemed to be a hint of genuine concern for the Korean shipping industry mixed in as well.
“The contract will be drafted by the operations team. In the meantime, why not take a short break? We’ll provide the Taewoo Group headquarters’ lounge for you. It’s not a hotel, but it’s sufficient for a brief rest,” I offered.
“Thank you. I’ll excuse myself for a moment. Phew!”
The lengthy negotiations finally concluded.
The creditors exhaled heavily, burdened by all that had been handled, and rose from their seats.
Yet Chairman Jo of Hyunjin Group remained until the very end.
Did he have something to say to me? As I approached, he spoke as if he had been waiting.
“Why did you make this decision? Honestly, I thought you were waiting for Hyunjin Shipping to go bankrupt. Didn’t we have a contract in place?”
“I had planned the same. But the circumstances have changed,” I replied.
We were initially planning to only pick off Hyunjin Shipping’s most valuable assets.
That was the original plan, but through the shipping company big deal, I changed the strategy to acquiring a super-giant shipping company.
“May I ask why you suddenly changed your plan?”
“My interest in the shipping companies was initially to ensure Taewoo Group’s products could be exported safely. But the more I understood the shipping industry, the more I realized how ridiculous that plan was,” I explained.
“Even though Taewoo Group is Korea’s top conglomerate, you can’t possibly ship only your products on every vessel. If that’s the case… was it really necessary to acquire Hyundai Shipping as well?”
The bigger the shipping company, the more cargo it could transport.
Acquiring both companies would naturally double that capacity.
I was well aware that this would also increase Taewoo Group’s burden.
“The shipping industry is dominated by alliances that function like cartels. To join an alliance—or to oppose one—you need scale,” I said.
“So that’s why you insisted on the big deal because of the shipping alliances. It won’t be easy. The shipping alliances are truly troublesome. Both Hyunjin Shipping and Hyundai Shipping have suffered greatly because of them,” one executive admitted.
Shipping alliances were essential for shipping companies.
By sharing cargo among alliance members, they could always operate ships at a consistent capacity.
It didn’t matter during a boom, but in a slump, the alliance prevented empty return trips, making it a crucial relationship for the shipping companies.
“Once the acquisitions are complete, I plan to engage with the shipping alliances. With Hyunjin Shipping and Hyundai Shipping combined, we’ll rank among the world’s top five in size. That should allow the alliances to offer us favorable terms,” I said.
“You underestimate the shipping alliances. Part of the reason Korea’s shipping industry is in its current state is due to the influence of these alliances. I suspect neighboring countries’ shipping companies deliberately exploited the weakened Korean industry to share the gains,” an executive commented.
It wasn’t enTyrely conspiratorial thinking.
Before my return, after Hyunjin Shipping went bankrupt, the biggest beneficiaries had been foreign shipping companies.
I recalled that particularly, the Chinese and Japanese shipping companies had reaped enormous profits.
“I’ll decide after meeting them first,” I said.
“Renegotiating the charter fees won’t be easy. Without that, turning a profit will be impossible,” an executive cautioned.
“I understand. We’ll have to address the charter fee issue step by step,” I replied.
In fact, the charter fee negotiations were already settled.
Most of Hyunjin Shipping’s charter fees were contracted with the shipowner company Seaspan, and I had already negotiated a 50% discount with them.
Of course, even a 50% discount was still quite steep.
Compared to Hyundai market rates, it was still roughly five times higher.
So while handling Hyundai Shipping’s charter fees, I also intended to push for an even greater discount.
“Please take good care of Korea’s shipping industry. From now on, it rests in the hands of Taewoo Group,” Chairman Jo said.
“You’re putting quite a burden on us. But even if we continue to see losses as we do now, I can promise that we won’t give up on the shipping industry,” I reminded them.
He held my hand with both of his, emphasizing his words.
It was clear how much he valued Hyunjin Shipping, and perhaps the strain of the Hyundai administration had brought a flood of emotions to the surface.
The shipping company big deal was successfully completed.
The moment the contracts were signed, all debts were paid in a lump sum to the creditors.
At that instant, Hyunjin Shipping and Hyundai Shipping were absorbed into Taewoo Trading.
“This will increase Taewoo Trading’s burden. Even though the losses weren’t shrinking, now Taewoo Trading has to take on the deficits from the shipping companies as well,” Han, the executive, commented.
“True, they’ll struggle with losses for now, but once the shipping, underground resources, and e-commerce sectors explode in growth, it’ll be worth it,” I replied.
Han worried that Taewoo Trading was being overburdened.
Understandably so, since most business divisions were operating at significant losses, and now with the shipping sector added, the deficits grew even larger.
“The stock market calls Taewoo Trading a trash bin. They say Taewoo Group dumps all its loss-making divisions into it,” Han added.
“Let them call it that. Soon they’ll realize it’s a treasure chest, not a trash bin,” I said.
Taewoo Trading’s rise was only a few years away.
Shipping, underground resources, and e-commerce—all shared one common trait: they would experience explosive growth in the coming COVID era.
When that moment arrived, Taewoo Trading would become a core affiliate of Taewoo Group.
It would more than make up for the Hyundai humiliation with a surge of power and growth.
“Since you say so, Chairman, I’ll trust and follow your lead. Also, I received a message from Chairman Joo Sung-jae of Daehan Tyre,” Han reported.
“Probably regarding investment in tyre development,” I said.
For electric vehicle production, developing EV-specific Tyres was essential.
We were conducting joint research with Korea’s three major Tyre companies, and Daehan Tyre, holding the largest market share, was the most active partner.
“It seems it’s not just about Tyre development. He insists on meeting you personally. If it were only about Tyre development, talking to the Taewoo Motors president would suffice,” Han explained.
“Chairman Joo is close to eighty, isn’t he?” I asked.
“He’ll be eighty next year,” Han confirmed.
There weren’t many reasons for a conglomerate head over eighty to want to meet me.
It was most likely to discuss the succession issues that all conglomerate leaders eventually face.
