Chapter 122
Chapter 122
[Establishment of TS Company, a joint venture between OTK Company and Seoseong SB!][Announcement of plans to build a battery factory in Rust Belt!][Scheduled to produce 40Gwh lithium-ion batteries per year when the factory is completed.][The largest investment in the battery industry!]The effect of the press conference was clear. Articles flooded the portal site immediately.
The joint venture was named TS Company, and was named after OTK Company’s T and Seoseong’s S.
The reason for the proposal to establish a joint venture in the first place was the stake. Currently, we have an 11% stake in Seoseong SB.
However, if we make a joint venture, we will have 70% of the shares. If you add the stake in Seoseong SB to this, it actually rises to 73 percent.
Vice Chairman Im Jin-yong positively agreed to this proposal.
In a situation in which Seoseong Group has not yet completely taken control of the management rights, there is a risk of questioning its ability if Seoseong SB is taken away by his younger brother.
He needed a card that could reverse the mood.
Joint ventures have the advantage of low investment and diversification of risks. As Seosung SB only needs to invest 30 percent, it can be sufficiently financed with the proceeds from the sale of its treasury stock.
Another reason was American pressure. Ronald has advocated America first since his candidacy.
After taking office, he openly pressured companies to set up factories in the United States and hire Americans if they wanted to sell to the United States.
This included not only automobiles, but all manufacturing industries.
Seosung Electronics and CL Electronics sell a huge amount of home appliances to the US, but they don’t have any factories in the US, and all of them are produced and exported in Mexico.
Competitor, US home appliance company Whirlpool, has requested the government to take safeguard measures, claiming that the two companies have caused severe damage.
If it was the previous president, the seeds wouldn’t work, but this president was different.
Ronald said that Suseong Electronics and CL Electronics are taking a serious blow to American companies, and threatened to activate the safeguards.
It was a car that was forced to consider relocating the factory, as it was a plate that had to pretend to match the assortment somehow in order not to be disadvantaged.
However, if we set up a battery factory in partnership with OTK Company, we were able to be freed from the problem of normal pressure to some extent.
* * *
Again, President Ronald posted a series of tweets by linking to his article as if he had been waiting.
-American manufacturing is reviving! Thanks OTK Company! Thank you so much!
– All companies exporting to the United States must imitate OTK Company and Seoseong.
– In the future, more factories will be built in the United States, and more jobs will be created.
At the end, all of this would have been impossible if he hadn’t been president, he added, adding a bit of self-bragging.
This announcement made Im Seung-yong embarrassed. He was promoting cooperation with Eunsung car, but Suseong SB suddenly took a step ahead and announced a joint venture with OTK Company.
However, in a situation where even the President of the United States is happy and blowing SNS, can we not say, ‘If I become the CEO, I will overthrow the joint venture and the American factory, and only cooperate with Eunsung Motors’?
Some media expressed negative opinions on behalf of Im Seung-yong, who could not speak directly.
Among them, the Chojung Ilbo column impressed me the most.
[Oversupply of batteries, is there any solution?]… … Seoseong SB’s battery certification is still being rejected in China, and the factory’s utilization rate remains at 70 percent.
Last year, the demand for electric vehicle batteries in the Chinese market was 25Gwh, but the production was 100Gwh, which quadrupled. In addition, in the global market, the oversupply rate of EV batteries has already exceeded 150%, and each company is competing with each other.
However, the attractiveness of electric vehicles is gradually declining due to the continuous drop in oil prices, and the demand for vehicle batteries is also stagnant. If government support is reduced in this situation, the entire industry will be in trouble.
Now is not the time to be dazzled by rosy prospects, but to face the grim reality.
We announced the establishment of a joint venture on Friday afternoon when the market closed. Therefore, it has not yet been reflected in the share price.
Shareholders’ opinions were mixed.
-Is the establishment of a joint venture a good thing or a bad thing?
– First of all, it’s a good thing.
– What are you talking about? I can’t even sell all the batteries I’ve made.
-If the oversupply problem is not resolved even after the completion of the factory, it will be a big deal.
– Even now, battery factories are being built all over China, and there will be an aftermath in a few years.
?Taekyu put down the newspaper and said.
“Don’t be fooled by the rosy outlook, but look at the harsh reality.”
very good word
If demand does not meet demand by investing hard to increase production, there will only be insufficient space for stockpiling.
I nodded.
“I was still trying to show you what the harsh reality is.”
* * *
next day.
At the Ceylon Hotel, Carlos CEO Daryl and Seosung Group Vice Chairman Im Jin-yong signed a business agreement and held hands.
It was the first time since Vice Chairman Im Jin-yong’s public appearance since the funeral of Chairman Im Il-kwon.
“From now on, Suseong Electronics and Karos decided to cooperate from the development stage in all fields such as motors, APs, sensors, and car infotainment. Also, all batteries produced by TS Company, a joint venture for the next five years, will be purchased by Karos.”
The reaction came quickly.
-Jinyong hyung, show the momentum.
-After acquiring Herman, you are entering the electric field business in earnest. Are you pushing the electronic and SB two-track?
-By the way, if Im Jin-yong is removed from Seoseong SB’s CEO position, won’t the investment plan be disrupted?
-In order to break through the previous high, we must unconditionally push Jinyong hyung.
– Jin Dragon, Gazua!
To say that it would purchase all five years’ worth of production was in fact the same as saying that Carlos took the risk.
Of course, this is a unilaterally favorable contract condition for Seoseong SB. This is because there is no need to worry about oversupply as long as stable sales are secured.
As soon as the market opened on Monday, the stock price of Seoseong SB broke through the previous high and soared to the upper limit. The stock price of Seosung Electronics also rose nearly 5 percent, reaching an all-time high of 2.61 million won.
Foreigners and institutional minority shareholders all turned to Im Jin-yong.
Suspicion of breach of trust against President Lee Soo-hak went into effect.
Until a few days ago, those who had been scolding the stock board for selling their treasury stock at a low price suddenly changed their stance and praised that the sale of treasury stock was a godsend.
Even the National Pension Service, which continued to buy at the peak and increased its stake to 19 percent, was praised for making a good investment.
As a result, the National Pension Service had no justification to oppose Im Jin-yong.
President Park Si-hyeong’s words to actively exercise his voting rights were in effect saying to support Im Jin-yong.
Now, the general meeting of shareholders was at least one thing.
When the trend has completely turned, Lim Seung-yong announced that he would not take the role of CEO, and Im Jin-yong was appointed as CEO of Seoseong SB with the support of everyone.
* * *
After the work was done, I spoke on the phone with Vice Chairman Im Jin-yong.
“You’ve worked hard, senior.”
[All thanks to the hard work of juniors.]The establishment of the joint venture was proceeding in an instant.
TS Company’s plant will be built in Rustbelt. This is because Ronald’s support base is where he can receive solid support.
The governors of Pennsylvania, Michigan, Wisconsin, Illinois, and Indiana, which are still in the Rust Belt, went out of their way to attract factories, promising land, tax benefits, and various conveniences.
[There will be interesting news soon.]“What?”
[You will find out soon.]I said hello and hung up the phone.
The job went well, but I don’t know if I can rejoice.
To buy an 11 percent stake in Seoseong SB, 2.8 trillion won was poured into it, and it is expected to cost 3.5 billion dollars to establish a joint venture.
Fortunately, you don’t spend $3.5 billion all at once, but invest $500 million first, and then invest the rest sequentially according to the plan.
After the investment is completed, there is not much cash left.
As soon as I thought about it, the pressure began to creep in. There are a lot of things that are open, and money is everywhere, but there is not much that comes in.
Businesses fail because they don’t invest, and sometimes they fail because they invest too much.
Nikola introduced the Model P to the world in 2009 and was evaluated as a revolution in the automobile industry. Since then, Model A and Model B have succeeded in succession, and the market cap of the company, which was only a start-up, has grown to exceed that of GM.
But Nikola has never made a profit since its inception. So far, the accumulated deficit has reached $1 billion.
If it had not been for the continued capital increase and issuance of bonds, it would have gone bankrupt sooner.
It is difficult to earn large sums of money for high-end cars over $100,000 because of the limited demand. Therefore, based on the recognition and technology accumulated in Model A and Model B, Nikola developed the Model TH, a mid-to-low-end sedan, and drew a warm response to the extent of pre-orders reaching 500,000 units.
Nevertheless, the reason the deficit does not decrease is that production cannot support it. What if there is a lot of demand?
As of last year, only 67,000 units were produced. No matter how large the margin per unit is, it is a shabby report card compared to Eunsung, which produces more than 8 million units per year.
Nikola’s CEO, Allen Eberhart, said that he would increase production to 150,000 units this year, but the prevailing expectation was that the half would be difficult.
We are walking the opposite path with Nikola. Even before the launch of a new car, they are building blindly from the production plant.
In this way, at least, there will be no production hell like Nikola.
However, the problem is that the money is running out faster than expected. It is not that there is no way to raise money, such as bank loans, bond issuance, and IPOs, but it is inevitable that it will be mentally burdensome.
“If the car doesn’t sell like this, aren’t we really going to die?”
“Okay.”
If you think about it, more than 30 trillion won was poured into the automobile business alone.
You’ve launched a new car, and if it doesn’t sell as expected, you’ll incur huge losses. In the worst case, it could go bankrupt.
“You have to make it so it doesn’t happen.”
* * *
The succession of management rights of Suseong Group has been ongoing even before Chairman Im Il-kwon passed away.
It is no exaggeration to say that the process is a comprehensive version of illegal and expedient.
Il-kwon Lim made Im Jin-yong buy unlisted stocks such as DS and Seosung Life Insurance at a bargain price and then listed them. And he drove work at the group level, centering on companies with high stakes in his son.
In this process, convertible bonds were also mobilized.(Read more @ wuxiax.com)
Seoseong SDL issued convertible bonds with a stake of 60 percent at a low price. Existing shareholders who have the right to buy have all given up on the acquisition. Since the price is significantly lower than the market price, it would be natural to compete to acquire even a little more. In the end, Jin-yong Lim bought all the convertible bonds, which no one was interested in.
The convertible bonds were immediately converted to Seosung SDL stocks, and then merged with Seosung C&T. And Im Jin-yong became the largest shareholder of Seoseong C&T, the group’s holding company.
Thanks to these various illegalities and expedients, Im Jin-yong was able to safely acquire the management rights of Seosung Group, which has a market capitalization of 400 trillion won, by paying only billions of dollars in taxes.
And finally, Im Jin-yong was inaugurated as the group chairman by unanimous vote of the board of directors. Until then, he had been acting as the king’s agent, and now he has officially ascended to the throne.
The funny news he spoke of came after a while.
[Seoseong Heavy Industries Board of Directors, President Removal Proposal to General Shareholders’ Meeting!][Seosung Engineering CEO Im Seung-yong dismissed confirmed!]No matter what he did, Lim Jin-yong took control of the boards of Seosung Heavy Industries and Seosung Engineering and proposed the dismissal of Im Seung-yong.
Lim Seung-yong naturally objected, but it was not enough to defend it with his own stake, as foreigners, institutions, pension funds, as well as minority shareholders supported Im Jin-yong.
In the end, the dismissal plan was passed, and Lim Seung-yong resigned from the position of president of both companies.
It didn’t end here.
Jin-yong Lim cut out all those who were divided into Yeon So-hyeon and Im Seung-yong from each affiliate. And he filled all the places with his own people.
He literally kicked his mother and brother out of the group.
Taehyung said with a surprised expression.
“I was greedy for Seoseong SB, but even my own was taken away.”
There was only no blood, but it was practically a purge.
“How are these two going?”
“Still, my fortune will be in the trillions, so I won’t go anywhere and die of starvation.”
However, unless they have management rights, they are simply individual shareholders who own a lot of stock. Even if he receives only dividends, he will live on food for the rest of his life, but it will be difficult to enter the business world any longer.
“Can I do this to my mom and my brother?”
“They say that power is not shared with the family.”
There are many examples of this in other countries as well.
Facenote CEO Mike Goldenberg expelled a dissenting partner before an agreement was reached after a legal dispute, and Nicola CEO Allen Eberhart ousted the co-founders and took over the position. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Come to think of it… … .
What would have happened if the shares of the OTK Company were split half and half as I said at the beginning? Maybe Taek-gyu and I didn’t fight to get each other out of the company, right?
I got up and said
“Let’s go get a beer. How about chimac?”
Taehyung nodded his head.
“good. I’ll have to call my sister.”
