The Chaebol Who Flies From Space - Chapter 15
Only Noblemtl
15. Eat raw (4)
“First, Toad’s debt is 2.7 trillion won. This has been confirmed several times through the main bank, so there will be no additional contingent liabilities. Next, the asset size is 1.1 trillion won. All the miscellaneous sectors that were problematic have been sold or closed down, and the remaining part is the liquor sector. Broadly speaking, the remaining parts are soju, beer, and whiskey. As you know, the facility investment in the beer sector, which requires a lot of money, has been completed, and there is no need to invest any more money. Except for the whiskey sector, which is not yet generating sales, everything has turned to a profit.”
The investigator, who was carefully examining the file I handed him, tilted his head.
“No matter what, isn’t the operating profit too small compared to the sales? Only 45 billion?”
That is understandable. Last year, over 1.2 billion bottles of Dugeobi Soju were sold, generating 900 billion won in sales. With this amount of sales, the operating profit should have been over 150 billion won, but the revealed operating profit is woefully inadequate.
After paying the interest on the debt of 2.7 trillion won, there was naturally a deficit of 250 billion won.
“The reason this chairman was arrested was because he embezzled company money, but where did he embezzle the money? The prosecution announced that he embezzled 120 billion won, but this was from last year. In reality, over 200 billion won went into the chairman’s pocket.”
My father and uncle got angry at what I said.
“He’s crazy.”
“He caused the company to go bankrupt and then embezzled the money.”
The two brothers, who had been taught the social responsibility of entrepreneurs since childhood, were angry, and their grandfather, who was close to the late founder of Toad, sighed.
“The deceased chairman will strike the ground from the ground. The company he worked hard to build his entire life was ruined by his son.”
“So, how much do you want to acquire it for? How much money do you need to prepare?”
“If we take over the bank loan in its entirety and acquire the seized shares of the major shareholders, the funds we need to prepare are 500 billion won.”
The three people who heard me were shocked.
“500 billion! You can barely afford to drink toad soju with that?”
“Yes, that’s a company that has only 700 billion won in bank loans. The government is naturally welcoming it since it’s punishing speculative funds that are a thorn in its side, and the banks have no choice but to cheer with both hands since bad loans are being turned into good loans.”
“500 billion? The company’s financial situation is···.”
“Ah! Hyung, why are you hesitating? Anyone can see that this is like buying a goose that lays golden eggs for a pittance. Yongwon has prepared everything for you, and you’re hesitating again.”
It was my uncle who beat his chest as if he was frustrated with his brother who was whining.
“I know that too, but the financial situation is that they need 500 billion won, but I only have 150 billion won in cash, so I’m worried.”
“Ramen is selling like crazy right now, so Yongwon is building an additional factory and will bring in a ton of money once the facility construction is finished. Do you really think it’s worth worrying about?”
The factory is operating as soon as the equipment is built, and is producing and delivering 40 million units per month. Once the stabilization phase is completed and the plant is fully operational, production can be increased to 950 million units per year.
We are looking for a factory to produce additional products, including for overseas markets, and we plan to finalize a contract soon.
“What are you going to do with the corporate bonds worth nearly 2 trillion won? From what I’ve heard of your plans, it seems like you’re going to blow them. Do you have a way to do that?”
The biggest issue was how to deal with corporate bonds.
The corporate bonds issued at close to 30% were converted to 12% upon maturity, and the interest burden was still high.
This had to be dealt with. Since the issued corporate bonds were coupon bonds and had to pay interest every three months, the cash flow was likely to be disrupted.
“Hmm, if you look at the last chapter, I have a simple explanation, but I guess you didn’t see it. My plan is simple. After I secure the management rights of Toad, I plan to physically divide the company. In short, I plan to divide it into a bad company and a good company, and then put the corporate bonds in the bad company and blow them.”
“Blow it?”
“……”
All three were speechless at the news that they would be issuing 1.9 trillion won worth of corporate bonds.
“So what you’re saying is that you’re going to split the company, keep the bank loans intact, and just blow the corporate bonds? Is that even possible?”
“Under normal circumstances, the government would not just sit back and watch. But this is a special situation, isn’t it? Even if we proceed as planned, there is no way for them to find fault with us. The government is pushing ahead, knowingly or unknowingly, and the bonds held by speculators are literally just bonds. We plan to resolve to physically divide the company through the general shareholders’ meeting and leave the corporate bonds intact in Bad Company.”
Doesn’t it sound evil to anyone who hears it?
A plan to concentrate bad debts on one company and then bankrupt that company.
Isn’t this a really good way to punish speculative capital that tries to suck up profits by pushing companies that are insolvent but still viable to the brink of collapse?
“Judging from Vice Minister Park’s reaction, it seems he is willing to actively cooperate, and it seems that taking over management rights will be the priority.”
“As soon as the court dismisses the lawsuit filed by Chairman Lee to cancel the seizure of stocks, we will sign a stock purchase agreement and take over the management rights. Earlier, my father was worried about the acquisition price, but we plan to cover 5,000 of the acquisition price with LBO. I’m talking to Citi and the interest rate is likely to be decided at 5%. Then, after acquiring Ddooby, the total loan will be 1.2 trillion won. The loan interest is 80 billion won per year, and if we just maintain the current sales, we will make more than 70 billion won in net profit every year. Please take over 15% of Ddooby for our food.”
The three people remained silent at my words, unable to find words to say.
In the end, it was like saying that you can eat the real deal, like toad soju, without spending a single penny.
Those were the words my father said to me, his mouth wide open and barely coming to his senses.
“A guy like a robber.”
“The real robber is the government that takes 72% of the liquor tax. And then there’s education tax and value-added tax. The factory price of soju is 450 won, but 250 won of that is tax. Does that make sense? The government also forcibly allocates the raw materials for alcohol, and the liquor market is like a honey pot that pays taxes to the government. They have the alcohol companies that are the raw materials for soju in their hands to make it easier to collect taxes, so they can’t cheat on taxes. Does it make sense that the liquor tax is a volume-based system? Since taxes are levied based on alcohol content, high-quality liquors can’t survive.”
The high-end liquor market was in shambles because of the liquor tax law.
The Korean liquor market was a market where only popular drinks such as soju and beer could barely survive.
“That’s been the case since the Japanese colonial period. It’s easy to tax liquor made in factories. That’s why all the traditional liquor has disappeared. Even liquor made at home for ancestral rites has disappeared because the National Tax Service is so noisy.”
“Yes, if you put out the yeast to dry, the National Tax Service will come and make a fuss. If the landlord runs away with the yeast, they will chase after him. It was really noisy.”
The three of them talked for a while as if they were reminiscing about the past.
“Anyway, the government is putting a big straw in soju, so it’s hard to make a big profit just from domestic consumption, but it’s a different story when it goes overseas. I’ve quietly asked that the principle be made to exempt alcohol from tax on products exported overseas, so I think it will pass.”
“Exporting? Even if you say you export, how much will it be?”
“Didn’t they set up a branch office to export toads to Japan and then lose it all? In fact, isn’t soju not a good alcohol? Soju is just cheap alcohol mixed with water.”
Everyone had a negative reaction to overseas exports. They said that soju was a cheap drink and not a drink worth exporting overseas, and that was true.
I would be grateful if the government thought so too.
“The government will cooperate with the export tax exemption, right?”
“The export amount won’t be much, so it would be nice if the government made a fuss about it.”
“I’ll do just that and then I’ll make a fuss about it.”
I felt relieved when people with more experience than me spoke in unison.
“Then, I understand that permission has been granted to take over the toad in your household.”
“How much money do we need to prepare for our food?”
“Please prepare 75 billion won for the acquisition price.”
My spirits were lifted as I left the house. As I walked to the parking lot where I parked my car, I racked my brain and realized that it was a great success.
“Hey, if only exports were tax-free, it would be huge.”
The soju that was tested on Russians visiting Busan and many Chinese people in Incheon received great reviews.
Russians, who enjoy drinking alcohol, prefer soju with an alcohol content of over 40 degrees, while the Chinese prefer soju with an alcohol content of 25 degrees.
[It is expected that this year, which is the early stage of overseas expansion, sales of about 400 million bottles will be possible due to distribution and product recognition issues. At least 2 billion bottles will be sold next year. If only tax issues were free, it means that more than 1 trillion won in profits could be made in the two countries every year. People die from fake alcohol in China and Russia every year. If soju enters the market, sales will be no problem. If even tax issues are freed, there is no need to say more.]
Whether it’s Russia or China, it’s a mess right now.
I don’t know what will happen when they come to their senses later, but these two countries are serious about alcohol.
I had to drink as much as I could before I came to my senses. Cheap alcohol like soju will eventually be banned due to tax issues.
Before that, I sold it after extracting as much investment profit as possible.
Given the nature of the adults in the family, it seemed like it wouldn’t sell.
“It’s a shame. We should sell it at a fair price when it’s expensive. If our overseas expansion goes according to plan, I’m confident we can sell it for at least 10 trillion won.”
[Master, it is easier to give up. Don’t listen to me later and just relax.]
“Yeah, you’re right. But it’s a shame! It’s a shame. If I sell it, I’ll just make money.”
[If you hold it, it’s a cash cow, so why sell it? Money is something you can make by investing.]
“······. I guess this is an occupational disease.”
When I heard something from Ariel, I suddenly came to my senses. I bought and sold a company, made a profit, and bought another company. This became a habit, so I unconsciously started thinking about selling it.