Story of a Big Player from Gangnam - Chapter 148
Chapter 148: Preparation for M&A (3) – PART 1
Gun-Ho decided to meet the Mulpasaneop’s creditors who were not a financial institution but vendors or subcontractors. He selected five of them that had the highest amount of money to receive from Mulpasaneop. The total amount of debt owed to these five creditors accounted for over 50% of the company’s total debt.
“Two of them are vendors just like YS Tech and the other three companies are suppliers of raw materials.”
Gun-Ho smiled at the fact that YS Tech was not one of the top five Mulpasaneop’s creditors.
“I guess the Mulpasaneop’s president paid YS Tech on time mostly since YS Tech’s president is his brother-in-law. Mulpasaneop currently owed YS Tech only 300 million won.”
Gun-Ho decided to meet with these three raw material suppliers first.
“This supplier is a huge company. Its president probably won’t want to meet a person like me. I guess I’d better contact a person in an executive or management level.”
Gun-Ho contacted a director of one of the raw material supplier companies.
“Hello, Mr. Director of H Group. I am a managing director of Mulpasaneop. Can we talk today?”
“Mulpasaneop? How things are going with the court receivership?”
“I will talk to you about it once I see you in person.”
Gun-Ho went to H Group Chemical in Dangjin City. Its factory was enormously big. The company was known to be hard to get in. Getting a job there was extremely competitive. The competition to get a position as a college graduate was 100:1.
When Gun-Ho arrived at the main gate, he left his ID with the security guard and sign on the guest book so they could let him in. The staff showed Gun-Ho to a small meeting room in the building. Even though Mulpasaneop was a small company, compared to H Group Chemical, Gun-Ho was its managing director; the staff treated him with respect.
“Of course it is important to have a high position title in a company.”
After quite a while, the director came to the meeting room with a manager.
“I sent too many raw materials to Mulpasaneop on credit, and that put me in a difficult position in this company.”
The director who was short and obese started complaining as soon as he saw Gun-Ho in the meeting room.
“I apologize for that.”
“I haven’t seen you in Mulpasaneop before. When did you join the company?”
“Not long ago, but I’ve heard a lot about you. I am aware that you have been favorable to Mulpasaneop and helped us a lot.”
“Well, as a matter of fact, I made my personal effort to supply raw materials to Mulpasaneop on credit. Since we don’t get paid for the materials yet, I am in a very difficult position in this company. So, has the court receivership been approved?”
“They haven’t decided it yet. I’d like to ask you a question, Mr. Director. If a company took over Mulpasaneop, will H Group Chemical still supply raw materials to them as it has always done before? It seems that your company has provided 2 billion won worth of materials to Mulpasaneop on a monthly basis.”
“If they could pay us the 5 billion won they owed to us first, then yes, we would keep supplying materials to them.”
“If they could pay you the 5 billion won in an installment payment, would you agree to the payment plan?”
“No, we can’t take that deal.”
“If you can’t accept the installment payment plan, the potential buyer of Mulpasaneop would give up on acquiring the company. If that happens, do you think you can still receive the 5 billion won overdue payment from Mulpasaneop?”
“If the company is to be sold, they should have money to pay off their debts, right?”
Gun-Ho shook his head from side to side.
“Mulpasaneop’s debt that was reported to the court is over 70 billion won.”
“What? 70 billion won?”
“Even if the company is sold off in pieces, they wouldn’t be able to pay even half of their debt. H Chemical would even hardly receive partial payment.”
“Hmm.”
“The best way to resolve it for both H Group and Mulpasaneop is that someone acquires Mulpasaneop and pays off the debt in an installment plan.”
“And we are supposed to continuously supply raw materials to them?”
“That’s right. For the overdue payment, the company will pay in installments; however, for the new raw materials supplied, we will pay right away the following month.”
“Hmm.”
“I came here today to ask you to withdraw the lawsuit you filed for the overdue payments because the buyer of Mulpasaneop will pay them in installments once he acquires the company.”
“Hmm.”
“The potential buyer wants to hear H Group’s confirmation on it so he could make his decision to acquire the company.”
“I can’t withdraw the lawsuit. I am an employee of H Group, and I have to show my superiors that I am making an effort to get the payments from Mulpasaneop. I think you should file an application for an objection to it. If you do so, the court will not issue a payment order for us right away.”
“I see. Thank you.”
“So are you saying there is someone who wants to acquire Mulpasaneop?”
“Well, you will see some changes to Mulpasaneop in the near future. I will talk to you then.”
Gun-Ho visited all three raw material supplier companies and suggested them with the same deal. All of them hoped that the buyer would pay them the overdue payments in installments, and they would continuously supply the materials to Mulpasaneop. Next, Gun-Ho went to see the other creditors—the vendors. One of them was located in Yesan Town, Chungcheongnam Province.
“Yuseung Tech? Hi, May I talk to the president? I am the managing director of Mulpasaneop.”
“Oh, you are the new managing director of Mulpasaneop, right? I actually was going to contact you. When are you going to pay us?”
“Are you aware that Mulpasaneop is in the court receivership process and all of the overdue payments are on hold pursuant to the court order?”
“I know that. But we are not a big company, and we need that money to conduct our business.”
“I am on my way to your company. I will talk to you when I get there.”
Yuseung Tech in Chungcheongnam Province didn’t look that small. The factory was probably over 3,000 pyung large.
The president was waiting for Gun-Ho at the main entrance.
He looked like a meticulous man in his 50s. His factory was very neat in its own way.
“Our company barely functions without 1 billion won that was supposed to be paid by Mulpasaneop.”
Gun-Ho told him that once the new buyer decided to acquire Mulpasaneop, they would make the overdue payments according to an installment plan.
“How many workers do you have here?”
“We have 90 workers. Our sales revenue is a little over 12 billion won. We currently provide our products to two companies: Mulpasaneop and another one called Jaewon.
When Gun-Ho worked in a factory years ago, he couldn’t even get a job in a company this big that had 90 workers. The factory that he used to work for was a small company with about 20 to 30 employees. The last company—YS Tech that he worked for was about the same size as Yuseung Tech.
“Okay, it’s all done.”
The meeting with the five major creditors of Mulpasaneop was successful.
“If I acquire Mulpasaneop, I wouldn’t have to pay their debts all at once. I can pay them in installments.”
