Episode 73: Acquisition of Seongjin Construction
So Sojang’s eyes changed significantly. His gaze was much more serious than before.
“Wow, it’s real… When did you get all of this?”
“I got it before coming out of Mannheim. It took a total of two months.”
“That’s ridiculous. Do you expect me to believe that?”
Lee Chang-jin shrugged at So Sojang’s skeptical look.
“Believe it or not, it doesn’t matter. Do you think I’d go as far as forging a certificate?”
After confirming the issuance date, So Sojang alternated his gaze between Lee Chang-jin and the certificate.
With a somewhat subdued look, So Sojang asked,
“This is unbelievable. But why are you trying to get into a risky business like construction? Isn’t your current business doing quite well?”
“Why are you asking when you already know the answer? Is there any business in the world that yields as much profit with little personal investment as construction?”
“Mr. Lee, construction may not require much capital, but the risks are high. Especially, it’s a business that needs technology, performance, and people, and the scale of domestic construction isn’t that large.”
“Director So, is there only domestic construction to secure projects? If we advance into the Middle East and secure international projects, it would be a jackpot. I need to hit it big once and earn foreign currency. I also need to be called a chairman of a conglomerate in my early 40s, don’t I?”
So Sojang looked at him incredulously.
“Man, do you think construction and manufacturing are the same? They are different industries.”
“What can’t I do? I can learn. Were Mirae Ju Il-hwan and Taeyang Nam Tae-gon owners of construction companies from the beginning? If I catch the right trend, there’s nothing I can’t do.”
So Sojang was taken aback by Lee Chang-jin’s boasting. If someone else had said this, he would have reprimanded them immediately. But for some reason, he believed him.
Though their first meeting wasn’t great, So Sojang was unknowingly impressed by Lee Chang-jin’s mix of boldness and experience. Noticing his hesitation, Lee Chang-jin spoke again.
“Instead of being like this, how about working with me?”
“Mr. Lee, if you take me with you, you’ll regret it 100%. Don’t bother a quiet person like me. Find someone else.”
“What are you afraid of?”
“Afraid? Of what?”
“Aren’t you resentful about being kicked out of Mirae? You lost your family and your property, so isn’t it all do-or-die now? As a man, shouldn’t you try to start again out of sheer resentment?”
“Um…”
Unable to respond, So Sojang was urged by Lee Chang-jin again.
“Director So, you should try wearing an executive badge at least once. I will treat you properly.”
“No. You brat. You think you can use me for a few years and then discard me?”
Looking dissatisfied, he blurted out,
“I hate contract positions. If it’s not a lifetime guarantee, don’t even think about taking me. I don’t care about the rank. Just give me a high salary.”
“Haha, if that’s what you want, I’ll do it.”
Staring blankly at Lee Chang-jin, So Sojang warned,
“You don’t know what you’re in for. Once a leech sticks, it never comes off.”
“Haha, for a leech to survive, its host must thrive first. Welcome, Director So. Just don’t pocket anything while working at our company. I’ll take care of you.”
“Alright. Alright. If I do, I’ll cut off my own hand.”
After So Sojang expressed his intention to join, Lee Chang-jin discussed how to acquire the construction business license.
“So, how will you start? Will you get a subcontractor license first?”
“No. A man shouldn’t be so timid. I plan to acquire a comprehensive construction company license from the start.”
“You’re planning to run a comprehensive construction company from the beginning? Can you handle that?”
A comprehensive construction company refers to a construction business possessing licenses in five categories: building construction, civil engineering construction, civil and building construction, landscaping construction, and industrial environmental facilities construction. However, Lee Chang-jin was calm.
“Yes. Having only a subcontractor license has clear limitations when securing projects. It’s easier for a comprehensive construction company to produce results. It also allows for business diversification during downturns, making it easier to mitigate risks.”
Nodding in agreement, So Sojang said,
“Indeed. Although it may be a burden initially, acquiring a comprehensive construction license is advantageous for securing large-scale projects. It’s complicated to get separate licenses later. Can you meet the license requirements?”
“Of course. We’ve already secured an office and factory site, so that’s not an issue. If needed, we can expand the existing office or convert a warehouse into an office. As our company manufactures heavy equipment, the registration equipment requirements are no problem.”
“Then there shouldn’t be an issue with the license requirements. Hmm… Do you have enough retained earnings? You’ll need a lot of capital for construction.”
“We have a substantial amount. Since our inception, we’ve operated profitably. We have about 1 billion won in reserve.”
After a brief thought, So Sojang suggested,
“That’s quite a bit of capital. Instead of starting anew, how about acquiring an existing company? It would be faster than building a track record from scratch. It’s tough to secure orders without a performance record anyway.”
It was a sharp insight typical of someone experienced in construction. By acquiring a company, you could inherit the construction performance of that corporation. This was precisely what Lee Chang-jin aimed for.
“Yes. That’s why I came to ask. Do you know any companies with good construction performance?”
“A decent comprehensive construction company… Wait a moment.”
While pondering with his arms crossed, So Sojang seemed to remember something and clapped his hands.
“Ah! There’s someone I know. A guy who used to run a construction company and is now about to lose his house.”
“Who is that?”
“Seongjin Construction’s CEO, Hong In-young. You know him, right? He’s reportedly on the brink of bankruptcy.”
Hearing the familiar name, Lee Chang-jin was surprised. Isn’t CEO Hong In-young the one who built the Maljukgeori container house?
“He’s skilled. What happened? Why all of a sudden…?”
“Recently, he got hit hard in a few places. He completed the projects but couldn’t collect the receivables.”
Lee Chang-jin had Ye Jin-ju and Lee Chang-sik investigate the debt situation, tax records, administrative dispositions, and overdue accounts. After some time, the two returned from their investigation.
“Did you confirm the situation?”
Ye Jin-ju adjusted her glasses and reported,
“Yes, as you said, Seongjin Construction seems to be under severe financial pressure. They’ve even received an eviction notice from their rented office building recently.”
“Why is that?”
“It appears to be due to dumping orders. After reviewing the balance sheet, their debt has increased significantly recently. It seems they overextended themselves to secure projects to maintain performance.”
Lee Chang-sik added comments while handing over additional documents.
“Here is the review report on overdue construction projects. Recently, they secured a dormitory construction project from a Taeyang Group affiliate, but the payment for additional construction has not been settled. They’re in a dire situation because the bank is urging them to repay interest using the oil shock as an excuse. Additionally, the land development project in Eunpyeong-gu, Seoul, and the sale of newly built row houses are facing difficulties.”
“So, did you confirm Seongjin Construction’s debt and overdue amounts?”
“Yes. While the subcontracting debt and materials pile up to 300 million won, the construction receivables and unpaid amounts to partner companies amount to 500 million won.”
Interestingly, CEO Hong In-young had put up his house as collateral but had never delayed paying his employees’ salaries. Hearing this, Lee Chang-jin was moved.
“Connect me directly with CEO Hong In-young. Deputy Ye, you saved the phone number last time, right?”
“Yes, sir.”
“Both of you did a great job. The investigation seems to have been done very well. Keep this confidential until the acquisition is complete, and report any additional findings immediately.”
“Yes, we will keep that in mind, sir.”
Watching Ye Jin-ju walk away energetically, Lee Chang-jin had another thought.
‘She’s too talented to just leave as a high school graduate. Should I let her attend night school?’
No one would have taught her, so she must have learned everything by herself. Being able to read a balance sheet was quite impressive.
Come to think of it, providing learning opportunities for employees wouldn’t be a bad idea.
The more certified employees there are, the more diverse work the company can handle.
‘First, I need to acquire the construction company and then think about it step by step.’
Three days later, at the Seongjin Construction headquarters located in Gwanhun-dong, Jongno-gu, there was an office on the 5th floor of the Il-nam Building, across from the famous Baekdubu House, known for its hand-made tofu, in the direction of Gwanghwamun Intersection.
Having previously contacted, Lee Chang-jin had a private meeting with Hong In-young.
“Hello, CEO Hong. It’s been a while since the Maljukgeori container construction.”
“Yes, Mr. Lee. Nice to see you again. I heard from Director So.”
Hong In-young looked much thinner, indicating he had been through a lot.
Lee Chang-jin conveyed the main points to Hong In-young.
There was no need for a lengthy explanation as the basic discussion had already been made through Director So.
“So… You want to acquire Seongjin Construction, right?”
“That’s correct. I understand Seongjin is under financial pressure. At this rate, it won’t last a few months. How about if I acquire the debts and receivables simultaneously?”
“Hmm. Collecting those receivables won’t be easy… Are you sure about this condition?”
“Haha, I’ve done my research. Take your time to review it, and if the proposal suits you, please contact me again.”
After reviewing the proposal overnight, Hong In-young was swayed. The transfer amount, including the acquisition of all debts and receivables, was a whopping 1 billion won. For Hong In-young, who struggled to pay even the office rent, Lee Chang-jin was a ray of hope.
‘Yes, it’s impossible for me to overcome this crisis with my abilities. A more capable and ambitious manager should take over the company.’
After much deliberation, Hong In-young decided to dissolve the company and arranged another meeting in Myeongdong a few days later.
“You made up your mind faster than I thought.”
“I didn’t have the luxury of time. If I’m going to dissolve it, it’s better to do it as soon as possible.”
“Please, have a seat.”
Lee Chang-jin offered a seat as they faced each other.
After silently drinking his coffee, Hong In-young began the main discussion.
“I carefully reviewed the transfer and acquisition letter you proposed. As long as you inherit all of Seongjin’s debts and receivables, there are no legal issues. As long as you guarantee employment, I have no further demands.”
Hong In-young was cautious. He had no leverage to impose conditions, so he worried that Lee Chang-jin might walk out. Hearing this, Lee Chang-jin smiled.
“Don’t worry about that. Your technical team is very impressive. Why would I dismiss such a talented workforce?”
“Thank you for your kind words. So, how will the employees’ salaries be handled?”
“At the very least, they will be frozen at current levels, and some employees may even receive increases. Don’t worry.”
Hearing that, Hong In-young’s face noticeably brightened.
“Thank you. As long as employment and salaries are guaranteed, I have no further demands. Also, I’d like half of the 1 billion won acquisition amount to be distributed among the employees.”
“Are you sure about that?”
“Yes… They’ve suffered a lot following me. They deserve at least that much compensation.”
Even in the face of losing the company, his concern for the employees was commendable.
Lee Chang-jin asked slyly,
“What will you do after the company is transferred?”
“Since this is all I know, I suppose I’ll continue doing this. People don’t die easily, so I won’t starve.”
Lee Chang-jin suddenly felt that Hong In-young was too valuable to let go.
“Then, I have a proposal. Would you be willing to stay on as an advisor for our company? I’ll ensure you’re treated well, equivalent to a senior executive.”
Surprised by the unexpected proposal, Hong In-young widened his eyes.
“That’s too generous. Is it really okay?”
Lee Chang-jin shook his head and reassured him,
“Aren’t you the one who has managed this company so well until now? Just keep doing what you have been. Besides, aren’t you a born technician?”
It was a hard offer for Hong In-young, who had a deep attachment to the company, to refuse.
Without further thought, Hong In-young bowed his head.
“Thank you. I will pour all my experience and know-how into this.”
Lee Chang-jin was inwardly pleased. His move to keep Hong CEO wasn’t just because of his character or abilities. To manage someone as cunning as Director So, some safety measures were necessary.
Feeling more secure, Lee Chang-jin smiled subtly.
Clap! Clap! Clap!
The sound of applause filled the auditorium, marking the launch of Daese Construction.
The auditorium was full of former Seongjin Construction employees, and on the podium, Lee Chang-jin gave the keynote speech.
“Seongjin Construction employees, today we start anew under the name Daese Construction. We will strive to build a construction company that leaps beyond domestic boundaries to global success, inheriting the vision of former CEO Hong. Please give your utmost effort in your respective positions.”
After the short speech, Lee Chang-jin headed back to his office.
Inside the remodeled office, orchids sent by Anyang Steel CEO Yoo Jun-tae and Cheongwoo’s CEO Kim Joong-oh had been delivered.
Looking around the interior, Lee Chang-jin picked up a nameplate that read ‘Daese Construction.’
The new glass nameplate felt substantial.
Not knowing how many business cards he would have in the future, he felt a deep sense of fulfillment as he started the business he had longed for in his past life.
Soon, Manager Goo entered to submit a report.
Shaking off his thoughts, Lee Chang-jin asked again,
“How is the company atmosphere?”
“Everyone seems relieved. I guess it’s because Advisor Hong stayed; no one has resigned.”
“That’s encouraging news.”
There was no need to hire new experienced employees, which saved effort.
After a moment, Manager Goo spoke with a worried expression,
“But sir, what will you do about the receivables? After investigating, it seems they’re in no mood to pay. It won’t be easy to get money from Taeyang affiliates.”
“Don’t worry. We have the best specialist in that area close by.”
“What do you mean by that?”
“You’ll see soon enough. I’ll handle it, so don’t worry. You’ve done well; you can leave now.”
“Yes, understood.”
After Manager Goo left, Lee Chang-jin picked up the phone.
“Hello? Is this Daehung Trading? Is Chief Jin there?”
“Yes. Please hold.”
Soon, there was a clicking sound, followed by Jin Seon-ah’s voice.
“Chang-jin! What’s up?”
Jin Seon-ah’s voice was filled with joy.
Having been busy, they hadn’t met for a while, so she was eagerly waiting.
“Oh, it’s nothing urgent. I just need to talk to you. Are you free today?”
“Hmm. What’s this about all of a sudden? Do you miss me?”
Jin Seon-ah’s voice rose in excitement.
“There are personal matters and business discussions. I thought it would be good to hold a board meeting, you know, kill two birds with one stone?”
“Hmm, business, you say? I’m quite busy.”
Suddenly, Jin Seon-ah’s tone turned cold, making Lee Chang-jin chuckle.
“Oh, let’s talk in person. Meet me in front of Korea Theater in Myeongdong at 4 PM.”
- Continued in Episode 74 -
