-…So, I believe DS Construction’s paid-in capital increase is the worst possible move.
-Thank you for your insightful comments. Currently, DS Construction has announced a paid-in capital increase allocated to shareholders and is experiencing a drop of more than 15%. The primary reason appears to be the realization of liquidity deterioration. Some speculate that DS Group chose not to allocate to third parties, which could force DS Construction to separate from DS Group and try to survive independently, according to experts.
Park Jin-hyuk listened to the TV and smirked.
“Experts, my ass—just someone else’s opinion, I’m sure.”
Thinking that the person who blew up at him over the phone yesterday was probably the source of that opinion, Park Jin-hyuk turned off the TV.
For the past few days, DS Construction had been the hottest topic in the stock market.
The scale of the paid-in capital increase was huge, one of the largest in years, and the fact that a major conglomerate’s affiliate was raising funds via shareholder allocation drew even more attention.
With all eyes on DS Construction, a new announcement halted the company’s plummeting stock price.
-Expert, how should we interpret this?
-Park Jin-hyuk is the eldest son of DS Group’s Chairman, Park Jun-man. He’s currently in charge of DS Construction’s restructuring, but as he’s rarely appeared in public, many are curious about him.
-And Park Jin-hyuk, the Managing Director, has announced he’ll acquire forfeited shares, correct?
-Yes. That was mentioned at the time of the capital increase announcement, but there was no concrete plan on how he’d purchase the forfeited shares. However, yesterday afternoon, a specific plan was revealed: he’ll secure 300 billion won, using DS Group’s holding company shares as collateral.
-How should we interpret this?
On TV, experts were engaged in a deep discussion about DS Construction’s announcement.
As it was the hottest news in the stock market, they devoted a lot of time to DS Construction.
-First, the amount announced was staggering. 300 billion won is almost half of the 800 billion won deficit DS Construction recorded last year. Injecting such a huge sum decisively answers the market’s doubts about the relationship between DS Group and DS Construction.
-You mean there’s a definitive answer? How do you interpret it?
-DS Group is not abandoning DS Construction, and they’re showing they have a surefire card to save it. Otherwise, a member of the owner family wouldn’t use the holding company shares as collateral or so confidently declare they’ll take responsibility for the forfeited shares.
The so-called expert spoke with conviction, while the anchor skillfully prompted further interest for the viewers.
-300 billion won is enough to absorb most of the forfeited shares, isn’t it? Should we assume Managing Director Park Jin-hyuk is optimistic about the post-restructuring situation?
-Yes. I, too, would vote that Managing Director Park Jin-hyuk is optimistic.
The expert nodded at the anchor, then looked into the camera and spoke in a firm tone.
-Currently, DS Construction’s capital increase is 800 billion won. Usually, after shareholder allocation, any forfeited shares go through a public offering. But this time, Managing Director Park Jin-hyuk announced he’d subscribe to all forfeited shares, skipping the public offering. This is truly a bold move. Forfeited shares typically indicate the future stock price is expected to be lower than the capital increase price. But Managing Director Park Jin-hyuk flatly denied that possibility, declaring he’d buy up all shares from those skeptical of the capital increase price. This is… really an unusual case.
Park Jin-hyuk watched them talk about him on the broadcast with a pleased look.
He smiled as DS Construction’s stock price soared during their discussion.
“Director, Deputy Manager Hyun says everything’s ready.”
“Really? Already?”
Park Jin-hyuk turned off the TV and got up from his seat.
He headed to where the reporters from various media outlets were waiting, taking the elevator down.
As soon as he stepped out, flashes from the waiting cameras greeted him.
Park Jin-hyuk pushed through the flurry of flashes, approaching the group gathered to meet him.
“Nice to meet you all. I hope you haven’t been treated poorly while waiting?”
Park Jin-hyuk greeted the Arab man in front of him with a handshake, and the interpreter translated his words into Arabic.
The two men chatted amicably for a moment, then took their seats at the prepared table.
After signing the contract, both men held up the agreement and shook hands again in front of the reporters.
Amidst the barrage of camera flashes, Park Jin-hyuk and the Arab man exchanged farewells and left their seats. Then Hong Myung-jin, head of the planning team, stepped up to the microphone and began briefing on the contract.
“Today, we’ve signed a contract with a Qatari real estate development company for the construction of the Lueil Plaza project, totaling 1.3 trillion won. The Lueil Project is to create a landmark in Lusail, the planned site for the Qatar World Cup finals, constructing four buildings, including a 70-story office tower and commercial spaces, with five basement floors. We’ll distribute press materials with more details, so please refer to those. If you have any questions, feel free to contact us at any time and we’ll respond in detail.”
As Hong Myung-jin finished, reporters everywhere began raising their hands to ask questions.
“Is the paid-in capital increase proceeding as planned?”
“The capital increase is unrelated to this contract and will proceed as scheduled.”
“Is Managing Director Park Jin-hyuk’s plan to acquire forfeited shares still valid?”
“As I said, the contract and capital increase are unrelated. The capital increase is to resolve concerns about liquidity, while this contract signals that DS Construction’s business will not be limited to the domestic market.”
Reporters in the briefing room speculated that DS Construction must have secured a significant advantage in Qatar’s development project through a private contract, rather than an open bid.
Seeing the contract coinciding with the capital increase, they grew more confident in the likelihood of its success.
As the press conference wound down, a reporter sitting in the back raised his hand and asked:
“There’s a rumor about Managing Director Park Jin-hyuk. Is it true that he’s planning to take DS Construction from DS Group and merge it with Dongjeong Industries?”
It was only a few words, but enough to send a chill through the briefing room.
A hush fell over the hall, as if the air had grown thick.
As Hong Myung-jin hesitated to answer, the reporter pressed again.
“A few months ago, Managing Director Park Jin-hyuk acquired a stake worth 90 billion won from Honorary Chairman Lee Jong-moo of Dongjeong Industries. At the time, there was speculation about a plan between Dongjeong Industries and DS Construction. Is that plan now becoming a reality?”
Attendees looked at one another, recalling Park Jin-hyuk’s stake acquisition in Dongjeong Industries.
Back then, people suspected he might be joining Dongjeong’s succession race, but since neither side confirmed nor denied, the rumor had faded.
Also, the 90 billion won stake wasn’t enough to disrupt Dongjeong’s succession, so people had written it off as just inheritance.
But if Park Jin-hyuk was planning to take DS Construction to Dongjeong Industries, it would be a different story.
“They say Chairman Park Jun-man is giving DS Construction to Managing Director Park Jin-hyuk for the succession of Dongjeong Industries. If DS Construction and Dongjeong merge, he’d end up with a greater stake than current Chairman Lee Sun-myung. What are your thoughts on this?”
The briefing room grew so quiet you could hear a pin drop.
All eyes turned to the reporter, then, as if on cue, focused on Hong Myung-jin standing at the front.
Despite the tricky question, Hong Myung-jin answered calmly into the microphone.
“Nothing has been decided yet. If you publish speculative articles, legal action will be taken against the parties and the media, so please be cautious.”
His words broke the silence.
“Is what you just said true?”
“Is there a big deal with Dongjeong Industries?”
“Please tell us. What will happen to DS Construction?”
“Is the capital increase just a ploy to gain an advantage in the merger?”
Questions poured in, but Hong Myung-jin simply gathered his papers and left without responding.
His behavior only piqued the reporters’ curiosity.
Reporters who’d come for the Qatar project contract now flocked to the merger rumors with Dongjeong Industries.
Some rushed to make calls, others quickly gathered their belongings to leave, and some tried to collect information through other channels.
Even after Hong Myung-jin left, a few DS Construction employees tried to warn the reporters, but when told, “It’s not an article unless it’s published,” they were at a loss for words.
The reporters, now chasing new prey, pounced in a frenzy.
*****
A few days later, the rumors that had circulated among the reporters began to show their effects.
Park Jun-man and Secretary Hwang watched the results unfold together.
“The stock price has risen to 15,000 won. At this rate, it doesn’t look like it’ll drop easily.”
“This is driving me crazy. Secretary Hwang, what am I supposed to do with that kid?”
“It was truly an unpredictable move. I think even Vice Chairman Park Soo-man was caught completely off guard.”
“Doesn’t it look like everyone gets a happy ending except for Soo-man?”
“Yes. The initial issue price for the capital increase is being set around 8,000 won. And judging by the trend, the second issue price will be higher than the first. If it’s fixed at 8,000 won, every holder of DS Construction stock stands to profit. No one will complain.”
Listening to Secretary Hwang, Park Jun-man nodded.
Even he could deduce this much from DS Construction’s stock movement.
“So there won’t even be any forfeited shares, right? Who’d pass on this capital increase? In the end, Jin-hyuk won’t even have to borrow against his shares, just like he said.”
“Wasn’t that your prediction as well, Chairman?”
“I did expect it. Normally, about 5% of forfeited shares would appear, so I figured Jin-hyuk would have to take on 40 to 50 billion won. But now… what are they predicting?”
At Park Jun-man’s question, Secretary Hwang checked the report from DS Securities.
“Given the current price trend and outlook, they estimate that only 0.01% or less of existing shareholders will forfeit the capital increase. Basically, almost all shareholders will participate.”
“I didn’t foresee this, even when I handed over the Qatar business rights… Is this all because of the merger rumors?”
Secretary Hwang couldn’t answer.
Though it wasn’t public, they knew the rumors roiling the market were shaking things up.
But knowing it and being able to bring it up were different matters. Secretary Hwang just kept his head down, gauging Park Jun-man’s mood.
“Why? Why did he need to start merger rumors?”
“Maybe to create this very situation?”
“This situation?”
“Yes. The rumor ensured the success of the capital increase and that no forfeited shares would be left. I think the Young Master exaggerated his circumstances to achieve this result.”
“But… that’s going too far.”
Park Jun-man tapped the newspaper on his desk.
Though unnamed, it spoke of a conglomerate heir taking a subsidiary to his maternal family’s company.
Even without names, it was clear: DS Construction was supposedly moving to Dongjeong Industries.
“Did it really have to be this way?”
“Chairman, please don’t be too angry. The Young Master probably got carried away while trying to do well.”
“No. There’s no way he did this without knowing. He was well aware of his stake in Dongjeong Industries. He had to know that as the story spread, talk of a sale would arise.”
“Then why did he do it?”
Park Jun-man pondered for a reason.
“To avoid creating forfeited shares? No, that can’t be it—he must realize he can’t stay in DS Construction under these circumstances. Would he really go so far just for that? Or is he actually planning to take DS Construction over to Dongjeong?”
“There’s no way the Young Master would do that, is there?”
“Sigh. Having to wrack my brain because of my own son… What a situation this is.”
“Still, isn’t it fun to worry about business matters rather than something else?”
Secretary Hwang smiled as he spoke to Park Jun-man.
He said it because, despite his troubled words, a smile crept onto Park Jun-man’s face.
Park Jun-man glanced at Secretary Hwang and grinned.
“Whatever the case, I can’t leave Jin-hyuk in construction any longer. Who knows what rumors might come out if I do? But honestly, thanks to that rascal, things are interesting these days. Not knowing what he’ll do next is what makes it fun. Hahaha.”
Park Jun-man looked up at the ceiling and laughed loudly.
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