Chapter 29. Dongwoo Precision (3)

DA Securities underwent an unexpected large-scale personnel reshuffle.

Executive Vice President Yang Jung-wook stepped down, and the executives in his line were replaced one after another. Although various confusions arose during this process, fortunately, things were gradually being sorted out.

Seong Yuna could feel the changed atmosphere around her.

Her mother, who had suddenly become the group's successor, was so busy that it was hard to see her even at home.

Her status had also changed, and marriage proposals began to pour in from all directions.

If things continued like this, it would be difficult to keep her identity hidden.

She wanted to continue working at the company as usual for a while, but that hope was quickly shattered.

During the reshuffle, one executive revealed her true identity, and the news quickly spread throughout the company.

When it was revealed that the new employee was the chairman's granddaughter and the only daughter of the next chairman, the company was thrown into chaos.

The supervisor, who had been yelling at her to do her job properly just the day before, suddenly became as gentle as a lamb, and the manager, who had been pestering her by putting his hand on her shoulder or sending unnecessary text messages on holidays, now turned his head away, breaking out in a cold sweat whenever their eyes met.

When lunchtime came, Seong Yuna came out through the back door of the company.

The employees, who had been gathered in small groups chatting happily, now avoided her gaze with tense expressions.

‘I guess I’ll get used to this over time.’

She approached Hwang Young-min and Bae Geun-seok, who were smoking in the smoking area.

Bae Geun-seok, looking surprised, quickly hid his cigarette behind his back and bowed his head.

“Oh, you’re here?”

Seong Yuna, finding it absurd, asked,

“What do you mean by ‘you’re here’?”

Bae Geun-seok scratched his head.

“Ah, no. I did it without thinking.”

“Are we going to treat each other like this just because we’re colleagues?”

In response to her words, Hwang Young-min, who was smoking next to him, spoke confidently.

“Right. Who cares who Yuna’s parents are? To us, she’s just a colleague. I don’t understand why everyone is acting this way.”

“Then why did you put out your cigarette?”

“Well, indirect smoking is bad for health, right?”

Seong Yuna sighed inwardly.

It’s unreasonable to expect them to treat me the same as before.

“Let’s go get lunch.”

The menu was budae jjigae.

Being here made her think of someone.

Seong Yuna muttered to herself without realizing it.

“I wonder what that person is doing now.”

Even though she didn’t mention the name, the two of them immediately knew who she was talking about.

“Han Miru?”

“She probably has a good life now.”

Hwang Young-min tilted his head.

“But was Han Miru always like that?”

“What do you mean?”

“Well, she seemed quiet before.”

Bae Geun-seok agreed and asked,

“She didn’t stand out much?”

“Right. But in the past couple of months, she seemed to have completely changed.”

“Oh, I felt that too.”

“She might have had a strong personality all along, but she was just holding back.”

Seong Yuna’s impression of Han Miru was similar.

A person who didn’t stand out anywhere.

Yet, such a person had turned the company upside down before leaving.

She had uncovered the mismanagement of Premus Fund and exposed it. However, she gained nothing from it and even lost her job.

Why did she throw herself into that task so desperately? It felt like she had a sense of mission.

The more she thought about it, the more questions arose.

While she was lost in thought, Hwang Young-min said,

“Your phone is ringing.”

“It’s fine. I can take it later.”

Bae Geun-seok added,

“It might be Han Miru.”

“What?”

At that, Seong Yuna put down her chopsticks and quickly picked up her phone.

“Hello.”

[Hello, this is Han Miru. Is it lunchtime? Can we talk for a moment?]

She composed herself and said,

“Yes, Miru. What’s up?”

[I have something to talk about. Can we meet?]

‘She wants to talk to me? About what?’

Seong Yuna, feeling flustered, asked,

“Um, when can we meet?”

[The sooner, the better.]

“Then, after work?”

[Yes. Tell me the time and place, and I’ll come.]

“Got it.”

After the call ended, Seong Yuna put down her phone.

Hwang Young-min and Bae Geun-seok, who were sitting opposite her, asked as if they had been waiting.

“Why did Han Miru call?”

“What did she say that made you so flustered?”

Seong Yuna was really flustered.

“W-When did I look flustered?”

“You look flustered now.”

“Let’s just eat.”

Seong Yuna half-heartedly ate the budae jjigae while thinking.

‘What should I wear? Do I have anything suitable at home?’

* * *

I hung up after making the appointment.

No matter what, I can’t go meet a woman looking like a beggar. I shaved my beard and put on some clothes for the first time in a while.

Seon-woo asked,

“Who are you meeting? Your girlfriend?”

“What girlfriend?”

“Sujin.”

“Oh! We broke up.”

Seon-woo looked bewildered.

“You said you were going to marry her?”

“...”

Did I say that?

“Can you make such a big decision so easily?”

“Then who are you meeting?”

“A former colleague.”

* * *

I met Seong Yuna at a café in Hannam-dong.

She was wearing a white sweater, an H-line long skirt, and a cashmere coat over it. Seeing her in casual clothes after always seeing her in a suit made her look different.

No, not just different—beautiful. This is what she looks like outside.

Seong Yuna asked me,

“How have you been?”

“I’ve been busy.”

If she knew what I’ve been up to, she’d be shocked.

We chatted over coffee. She seemed happy to see me, like an old friend, and talked about various things.

Thinking about it, it’s quite surprising.

In the first cycle, we were just acquaintances who occasionally greeted each other, but now we’re meeting outside for coffee.

It feels like we’ve known each other for a long time.

So much has changed since then.

“Why did you want to meet me?”

I carefully said,

“Actually, I have something to talk about with you.”

“T-Talk about?”

“Yes. I thought about whether I should talk about this, but I couldn’t stop thinking about you.”

“R-Really?”

For some reason, she seemed very tense.

I could guess what she was thinking. What could a former colleague who suddenly wants to meet have to say?

“Don’t worry. I’m not asking for a loan.”

Seong Yuna chuckled at my words.

“Then what is it?”

“Don’t misunderstand this.”

“Okay, I won’t. Just tell me.”

I made up my mind and spoke.

“I want to buy Dongwoo Precision’s corporate bonds. Can you help me with that, Yuna?”

As expected, she was taken aback and her expression froze.

After a moment of silence, Seong Yuna asked, almost in a whisper,

“...What?”

She looked extremely flustered.

Of course, it would be strange to suddenly receive such a request.

Unlike stocks, bonds are not easily accessible to the general public.

Even corporate bonds issued by the same company can vary greatly in terms of interest rates, maturity, and conditions depending on the issuance period, so bond brokers specialize in mediating them.

To buy a large amount of junk bonds, you inevitably need the help of an institution.

Seong Yuna sighed and asked,

“Why Dongwoo Precision’s corporate bonds all of a sudden?”

I made up an excuse.

“I have a rich friend, and I’m helping him with his investments.”

“Asset management?”

“Something like that.”

Seong Yuna asked,

“How rich is he?”

“You’ll be surprised.”

“I won’t.”

I cautiously said,

“He has about 130 billion won in cash.”

She nodded.

“I see.”

Her expression didn’t show any surprise at all.

From my perspective as an ordinary person, 130 billion won is a huge amount, but perhaps she thinks it’s normal for a rich friend to have that much.

“By the way, isn’t Dongwoo Precision currently suspended from trading? It’s going to go bankrupt soon.”

“Oh, you know.”

“After the Premus incident, the Financial Services Commission formed a dedicated inspection team and started an investigation. As a result, fund managers are selling off bad debts en masse, including Dongwoo Precision’s corporate bonds. The bond rating has likely dropped to CCC-.”

Typically, BBB- is the threshold for investment-grade bonds, and anything below that is considered non-investment grade. CCC- is almost at the bottom.

As expected, she knows a lot as part of the audit team.

“How much do you want to buy?”

“All 130 billion won.”

Seong Yuna’s eyes widened.

“At that amount, the face value would be over 1 trillion won.”

It’s too early to be surprised.

“I plan to focus on the subordinated BWs issued in the last two years.”

This time, she opened her mouth wide.

“Are you serious?”

The reason she’s so surprised is simple.

A corporation is a limited liability entity.

This means that even if the company goes bankrupt and can’t pay its debts, shareholders are not liable for the losses.

If the company goes bankrupt and there are remaining assets, they go to the bondholders, not the shareholders. However, the order in which they receive the money depends on the type of bond.

Subordinated bonds are, as the name suggests, ‘subordinated.’

This means that after senior bondholders have recovered their principal and interest, any remaining assets go to the subordinated bondholders.

But how many companies that are about to go bankrupt have enough remaining assets?

In the end, if you hold subordinated bonds, you won’t get anything if the company goes bankrupt. They are considered the worst type of junk bonds.

However, the higher risk comes with higher returns. Subordinated bonds typically have interest rates 1-2% higher than senior bonds or come with additional conditions.

“Can I ask why you want to buy Dongwoo Precision’s bonds?”

No one buys the bonds of a company they think will go bankrupt.

The reason for buying these bonds is, of course, ...

“Dongwoo Precision will recover.”

Seong Yuna was shocked again.

“Is that true?”

“I’ll explain the details later. Can you help me?”

After looking at my face for a moment, Seong Yuna nodded.

“Okay. I’ll look into it right away.”

I smiled.

“Thank you.”

* * *

Dongwoo Precision is a mid-sized company with a history of over 30 years.

It first entered the semiconductor market in the late 1990s and gained a reputation as a strong company by contributing to the localization of semiconductor components with its solid technology.

Dongwoo Precision mainly raised funds through bonds, along with R&D investments for new products and the construction of new factories.

During the last two years, when the semiconductor industry was experiencing a super cycle, the 300 billion won worth of subordinated BWs issued by the company were easily sold out.

Now, however, everyone is trying to sell these bonds.

BW (Convertible Bond with Warrants) is a type of corporate bond.

Compared to regular corporate bonds, BWs have lower interest rates but come with the right to purchase new shares at a predetermined price upon maturity.

If the stock price is above the exercise price at maturity, you can buy the shares and sell them for a profit. If the stock price is below the exercise price, you can simply not exercise the right.

Dongwoo Precision’s BWs have a 5-year maturity with an annual interest rate of 7.6%, paid quarterly.

The interest rate is good, and it comes with warrants.

Given the current interest rate environment, this bond should be trading above its face value. However, the actual bond price is only 10-15% of the face value.

The exercise price for the warrants is 12,000 won, but the stock is currently trading at 6,580 won and is suspended from trading. In reality, exercising the warrants is impossible.

Since the company will likely go bankrupt, people are trying to sell the bonds at a steep discount to convert them into cash.