I Am the Third-Generation Heir of a Conglomerate - Chapter 436



Only Noblemtl

436. Renegotiation (1)

Jerry Wang, CEO of Sespan.

He came to Korea.

We’ve already prepared to roast him.

But Jerry Wang wasn’t the CEO of Sespan for nothing.

He was trying to proceed with the negotiations in a direction we had never expected.

“It appears that CEO Jerry Wang entered the country with 20 ship owners.”

“20 ship owners? Are they the ship owners who leased their ships to Hyunjin Shipping and Hyunjae Shipping?”

“We haven’t been able to identify all 20 people, but of the eight we have identified, they are all shipowners associated with two shipping companies.”

Why did CEO Jerry Wang visit Korea with ship owners?

The reason was obvious. They were putting on a show to seize the initiative in renegotiation.

“It looks like they are planning to raise the charter rates through renegotiation.”

“The planning department believes that instead of trying to persuade 20 ship owners, he wants to change the charter rate discount from 50% to 30%.”

Sespan had already agreed with me on a 50% charter fee.

But it wasn’t the other shipowners, it was Jerry Wang, the CEO, who was showing off his power to get a charter fee agreement at 30% across the board.

“He is certainly a great man.”

“How about postponing the negotiation schedule? If we go into the negotiation table like this, Jerry Wang will take the initiative.”

“You came all the way to Korea, so I can’t keep you waiting. Do you have any plans for this evening?”

“We have agreed to hold negotiations at headquarters at 7 p.m.”

“Go ahead and do it that way.”

I think I know what Jerry Wang’s plan is.

He showed up with a large number of ship owners and started renegotiating without giving us time to think.

It wasn’t a bad operation, but it wasn’t one I had any reason to oppose.

This means you don’t have to go through the trouble of meeting 20 ship owners one by one.

“Mr. Chairman, CEO Jerry Wang and the ship owners have arrived.”

It was CEO Jerry Wang who visited the Taewoo Group headquarters with a proud appearance.

Behind him, twenty ship owners were lined up, perhaps to show off their power.

“Welcome to Taewoo Group. We may not be ready for you as we are receiving guests unexpectedly. We ask for your generous understanding.”

“A glass of water is enough for us. What else do we need when negotiating charter fees? Hahaha!”

Jerry Wang was a completely different person than when I first saw him in China.

At that time, the short selling attack had weakened their spirits, but now that the short selling threat has ended, they are holding their chests out in pride.

“I will invite you inside.”

He guided the guests into the conference room with a smile.

Jerry Wang looked momentarily embarrassed when I came out so naturally.

Did you think I’d feel burdened if you brought 20 ship owners with you?

What a surprise, I was so grateful that I wanted to hug you.

“Since you are busy, let’s start with the charter fee negotiations. First, we have already renegotiated with Sespan. We have signed a contract to give a 50% discount on the charter fee if Taewoo Group takes over the shipping company.”

“Ahem, in the case of Hyunjin Shipping, that’s true, but shouldn’t we try negotiating again for Hyunjin Shipping? And in the case of Hyunjin Shipping and Hyunjin Shipping, due to lack of funds, we considered discounting charter fees, but now that Taewoo Group, which has strong financial power, has become our parent company, is there really a need to discount charter fees?”

Are you going to come out like this?

Chairman Jerry Wang made remarks that seemed to return the charter fee discount to its original state.

It didn’t really seem like he meant to nullify the charter fee discount, and it seemed like he made a bold statement to seize as much initiative as possible.

[Chairman Jerry Wang is right. It is unacceptable to renegotiate a contract that has already been signed.]

[But since the shipping industry is having a hard time these days, shouldn’t we help them out a little? Surely they wouldn’t ask for a 50% discount without any conscience, right?]

[First, let’s listen to Taewoo Group’s story and then decide. Isn’t that polite?]

Ship owners also provided support fire.

They were the ones who had planned it in advance and at the same time were driving me into thinking I was a person without conscience.

If you think I’m going to back down because of that, you’re mistaken.

Rather, when this kind of atmosphere is created, I tend to be more assertive.

“Compared to when the contract was signed, the charter rate has fallen by nearly tenfold. It was the shipowners who forced the unfair 10-year long-term contract.”

[An unequal contract? Did they threaten us into signing the contract?]

[When you first came forward saying you would sign a 10-year long-term contract, why are you saying something different now!]

[If it’s going to be like this, I’d rather have the ship repossessed!]

When I stood up strongly, the ship owners did not stay still.

There were even ship owners who took the drastic measure of recalling their ships.

“I haven’t said any conditions yet. No matter how high the charter fee is, I’m not the kind of person who would be rude enough to renegotiate without any conditions.”

“Ahem, first, listen to Chairman Kim’s words until the end and then make a decision.”

Chairman Jerry Wang calmed the ship owners.

He was already smiling sinisterly, as if he thought he had taken the initiative.

“I can offer three conditions. I understand that ship owners are also feeling financial pressure due to the slump in the shipping industry. So, if there are any ship owners who would like to dispose of their ships first, Taewoo Group will purchase them.”

It was a time when even just owning a ship would result in a deficit.

Shipping companies that had signed long-term contracts were in arrears with their charter fees, and if they signed new contracts now, they would only receive 10% of the charter fees, which was a loss in many ways.

For those ship owners, I opened an escape route.

An opportunity to hand over loss-making ships to Taewoo Group and leave the shipping industry.

Some ship owners showed great interest and even asked the purchase price of the ships.

“We will purchase the ship at the current market price.”

“What other conditions are there?”

“I understand that the charter contract will end within three years starting this year. I would like to renegotiate the charter contract with the condition of signing an additional five-year contract.”

The shipping industry was ultimately a market governed by the rules of supply and demand.

As new ships continued to be built, charter rates were falling.

Therefore, since no shipowner expected the charter rates to rise, the additional five-year contract term was a very attractive proposition.

“I guess it’s because Taewoo Group owns a financial company that they are trying to ride the wave of charter fees like stocks.”

“Can’t we agree on a reasonable charter rate through the old and new contracts?”

A frequently used trick in stocks.

The strategy was to buy more stocks at the low price when the stock price of the stocks you own falls, thereby lowering the average unit price.

There was no law that said you couldn’t ride the wave just because it was a charter fee.

If there was a condition for signing an additional 5-year contract, it was not a bad contract at all for the ship owners.

“It’s not a bad deal, but shouldn’t we take care of the overdue charter fees first?”

“Of course. As soon as the charter fee renegotiation is completed, we can deposit the overdue charter fees today.”

“Are you saying this knowing how much the overdue amount is?”

“I understand it amounts to 4 trillion won.”

Shipowners suffering from financial constraints.

To them, the 4 trillion won in overdue charter fees was like rain in a drought.

But if you don’t sign the renegotiation of the charter fee, the rain won’t fall.

“Does that mean that I have to renegotiate before you can deposit the overdue charter fees today?”

“It is inevitable that we have to do so.”

“That sounds like a threat.”

“This is not a threat, but I apologize if it sounded that way. Let me repeat my offer: take over the vessel, sign an additional five-year charter, and finally, pay the overdue charter fees in one lump sum.”

“So how much discount on charter fees do you want?”

“I would like to receive a 70% discount on the charter fee for the existing contract. In return, I will give you the best treatment for the new contract. And I will pay the charter fee for the new 5-year contract in a lump sum.”

I threw down the last card.

Lump sum payment of overdue charter fees and additional 5-year charter fees.

It was an amount that could clear the blocked financial situation in one go.

No shipping company ever paid five years’ worth of charter fees at once, and this was overwhelmingly favorable to the shipowner.

“To be honest, it is a very good deal that no other shipping company has offered. But a 70% discount is too much. Don’t you think?”

[It’s too much. I can get the money all at once, but considering the losses I’ve suffered so far, it’s money I should definitely get.]

[Ahem, if the charter fee is around 50%, I’ll consider it, but if it’s 70%, it’s better to just repossess the ship!]

[I don’t understand why a huge company like Taewoo Group is being so petty. Let’s just give them a 50% discount on charter fees.]

Didn’t the sailors on the ship say it was rough?

Not only the sailors but also the ship owners were people with one personality.

Even though I made a very bold proposal, the ship owners were not satisfied and showed their character.

I went out strong again because if I kept coming here and saying yes, I would keep climbing.

“If you find it difficult to accept the terms, you may take back the vessel as you wish. However, the overdue charter fees will be arbitrated through international litigation.”

“Chairman Kim! You are making threats outright. Do you think you can run the shipping company properly if we all take back the ships at the same time?”

[What kind of negotiation is this with someone who doesn’t know the value of a ship?]

[I came all the way to Korea and got treated like this. What a mess.]

[What are you all doing? Please stand up.]

They were captains who pretended to get up from their seats.

But in reality, no one got up from their seat and went outside.

He just raised his voice and whined, demanding better terms.

“Sir, please play the prepared materials.”

“We will broadcast it on a big screen.”

There was a large screen at the front of the conference room.

The planning director broadcasted the materials prepared in advance onto a large screen.

“This is the number of ships owned by Taewoo Group and the list of ship owners in which we are the largest shareholder.”

The number of ships owned by Taewoo Group was beyond imagination.

During the various economic crises, ships were purchased through Japan, China, Greece and Europe.

To be exact, it could be seen that they received ships instead of money, and the number of ships they possessed was enough to surprise the ship owners.

[Didn’t Taewoo Group say that this was their first time starting a shipping company?]

[I heard that the ship went somewhere during the economic crisis, but it was Taewoo Group.]

“Ahem, everyone calm down and let’s continue listening to what Chairman Kim has to say.”

The voices of the ship owners have been greatly diminished.

This is why I was grateful when Chairman Jerry Wang came leading more than 20 ship owners.

Taewoo Group had absolutely no reason to be dragged around by ship owners.

“The number of ships owned by Taewoo Group exceeds 600,000 TEU. Compared to the number of ships chartered by ship owners to Hyunjin Shipping and Hyunjeon Merchant Marine, it is by no means small.”

“So you’re saying that even if we take out ships, we can still run the shipping company sufficiently?”

It was CEO Jerry Wang who finally understood what was being said.

The initiative in the negotiations passed from him to me in an instant.