Receiving the sudden request for a eting, Seok-won had already suspected there was sothing the governnt wanted from him. So he showed no surprise as he calmly followed up with a question.
"You're asking to acquire the three financial subsidiaries of the Hyunwoo Group?"
Despite the weight of the proposal, he stayed composed. Chief Secretary Woo Chun-il, once again reminded of Seok-won's remarkable steadiness, answered:
"That's right."
"As far as I know, negotiations were already underway with AIG, and I heard an MOU was signed. Did things fall through?"
Woo Chun-il's brow tightened slightly.
"They completed due diligence last month, and the investnt amount had even been outlined. But suddenly AIG started making unreasonable demands, and negotiations have been stalled ever since."
"You an their request to extend the maturity of the securities finance bonds and to lower the interest rate."
"Exactly."
One of the subsidiaries up for sale—Hyunwoo Investnt Trust—had received 2.5 trillion won in securities finance bonds from the governnt two years earlier, in exchange for acquiring the nearly bankrupt Hannam Investnt Trust.
But AIG was now demanding that the bonds' maturity be extended and that the interest rate be cut from the current 6.6 percent to 3 percent—more than a fifty percent reduction.
Looking frustrated, Woo Chun-il took a sip of his green tea and continued in an irritated tone.
"They won't even pay a managent control premium. Instead, they want the new shares at a ten percent discount. And on top of that, they're asking for maturity extensions and lower interest rates? They're pushing it too far."
"They're exploiting the governnt's desperation. With the sales of Daegwang Motors and Hanbo Steel collapsing, Korea urgently needs foreign investnt results. AIG knows that and is trying to squeeze out every possible advantage."
"They're worse than a pack of wolves."
Knowing that the governnt was being pushed around yet had no choice but to endure it, Chief Secretary Woo Chun-il let out a small sigh.
"The problem is that even if we're willing to grit our teeth and concede, it isn't sothing we can easily do."
"The 2.5 trillion won in securities finance bonds was issued as long-term bearer bonds. To reissue them, the governnt would have to and the Real-Na Financial Transaction Act. Realistically, that's impossible."
"You're well-inford, as expected. And even if we could et their demands and reissue the bonds, we'd have to refinance at the actual market rate of seven to eight percent. That ans the governnt would end up absorbing a four to five percent loss just from the interest-rate difference."
"That's unavoidable."
"On top of that, shareholders are already furious that the new shares are being issued at a price far below market value. If word gets out that we're not only handing over a company at fire-sale prices but also giving AIG a massive profit funded by taxpayer money, public opinion will explode instantly."
"So that's why you're proposing that I acquire the three Hyunwoo Group financial subsidiaries instead of AIG?"
At Seok-won's calm question, Chief Secretary Woo t his eyes squarely.
"I know it's shaless to ask after all the help you've already given during the foreign exchange crisis… but yes."
"To be frank, after acquiring Daegwang Securities recently, there isn't much strategic advantage for in taking over Hyunwoo Securities and the other Hyunwoo financial affiliates."
Woo Chun-il, growing anxious, leaned forward and tried to persuade him.
"I understand. But if things continue like this, the sale will either collapse entirely or we'll end up caving to AIG's outrageous demands. And we can't let that happen."
"..."
"If you're willing to step in, the governnt will offer every possible accommodation within its authority."
Faced with repeated requests, Seok-won sat with his arms crossed, wearing a thoughtful expression.
Even though Woo Chun-il was a key power figure in the administration and a close aide to President Kim Jae-chun, Seok-won was not soone who could be pressured. All Woo Chun-il could do was wait anxiously and hope for a favorable answer.
By the ti the green tea on the table had cooled, Seok-won finally spoke, ending Woo Chun-il's silent agonizing.
"As you said, I can't simply watch valuable dostic companies be sold off cheaply to foreign capital. I'll acquire the Hyunwoo Group financial subsidiaries."
Hearing the answer he'd been hoping for, Woo Chun-il brightened instantly.
"Thank you. Truly."
"But I have one condition."
"Anything. Na it."
"I want to purchase the land belonging to Gangnam City Hospital in Sinnae-dong and the Korea Appraisal Board site next to it."
"You're saying you want the Gangnam City Hospital land and the Korea Appraisal Board land?"
"That's correct."
Gangnam City Hospital was a major public hospital that, four years later, would be renad Seoul dical Center.
The Korea Appraisal Board was a state-run institution responsible for surveying, managing, and reporting real estate prices.
The two properties sat side by side in a single block right next to the Tancheon stream.
Combined, the two sites totaled 51,107 square ters—about 15,459 pyeong.
It was pri real estate in Gangnam, with the Sports Complex across the river and COEX just nearby.
Even today it's one of the most desirable locations in Seoul, but in the future, it'll be worth more than gold.
In fact, twenty years later, the combined valuation of the two sites would approach three trillion won—so it wasn't an exaggeration.
It was land anyone would covet. Transferring both sites to a specific individual or company in one piece would inevitably trigger accusations of favoritism.
Unsurprisingly, Woo Chun-il, who had confidently promised "anything," now hesitated, unable to respond imdiately.
Seeing this, Seok-won spoke again.
"I'll purchase the land at full market price so there won't be any accusations of favoritism."
But Chief Secretary Woo Chun-il still looked troubled.
"Even at market price, if the governnt suddenly sells both plots to one person without prior notice, people will talk. There's no avoiding that."
Then, watching Seok-won carefully, he asked:
"Could you ask for sothing else instead?"
Seok-won let out a quiet sigh, making no effort to hide his disappointnt.
"I'm agreeing to acquire companies I don't particularly need—spending a billion dollars to do so—and yet you can't grant sothing this small? I can't deny I'm disappointed."
"It's not that it can't be done. I'm just saying it could cause trouble for both the President and you."
Seeing him try to justify himself, Seok-won spoke gently.
"Then how about this."
"Do you have a better idea?"
"It'll take ti for Gangnam City Hospital to relocate anyway. So I'll purchase the land now, and for the next five years, I'll let the governnt use the existing buildings for free."
Chief Secretary Woo's eyes widened at the unexpected proposal.
"You're saying you'll really do that?"
Allowing the governnt to use the entire property rent-free for five years—after purchasing it—was undeniably a deal in the governnt's favor.
Seok-won nodded without hesitation.
"That way, it'll be harder for anyone to claim it's favoritism."
"True. If your profit from the deal isn't large, there won't be much for critics to latch onto."
Woo Chun-il looked genuinely surprised; he had never expected an offer like this.
Under normal circumstances, only a philanthropist would let the governnt use such pri land for free.
But if he knew how astronomically Gangnam land prices would rise over the next two decades, he would understand—Seok-won wasn't losing anything at all.
Not to ntion, the area is already fully developed. Considering how difficult it is to secure a single, flat plot of land this large in Gangnam, the value is even higher.
Just looking at the KEPCO site nearby—which would be auctioned off fourteen years later for an unbelievable 10.55 trillion won—was enough to show how valuable this land truly was.
Sensing Chief Secretary Woo's resolve beginning to waver, Seok-won added another point.
"And if I acquire the Hyunwoo Group financial subsidiaries, I won't ask for a managent-control premium. Instead, I'll purchase the newly issued shares at full price—no discount."
Woo Chun-il leaned forward at once, eyes widening with interest.
"You an you'll really buy the new shares without any discount?"
"Yes. If we do it that way, the backlash from existing shareholders will be greatly reduced."
"Of course it will."
AIG's excessive demands weren't the only obstacle. The strong opposition from existing shareholders of the Hyunwoo financial subsidiaries was another key factor delaying the sale.
To reduce debt, the governnt wasn't selling its own shares—it was pushing a plan to issue new shares and have the buyer acquire those instead.
But that would dilute the stake of all existing shareholders.
That alone was enough to spark outrage, and issuing the new shares at a 10 percent discount below market price had made the backlash even worse.
However, if Seok-won agreed to buy at full market value with no discount, the issue disappeared completely.
"In that case, the investnt amount will exceed the one billion dollars that AIG offered. Is that all right?"
Seok-won replied effortlessly, as if it were nothing.
"I recently earned quite a bit, so funding won't be a problem."
Chief Secretary Woo imdiately understood—he was referring to the enormous profits from his short positions.
Considering that top executives from major Wall Street banks had rushed to Seoul just to negotiate with him, it was clear he could handle a deal of this size without concern.
The idea of handing over the Gangnam City Hospital and Korea Appraisal Board land still tugged at him a little.
But if this deal eased shareholder resistance and prevented accusations of a fire-sale to foreign investors, it was more than worth it.
Most importantly, completing the sale of the Hyunwoo financial subsidiaries before the year ended would give the governnt much-needed relief from the IMF's relentless pressure to restructure conglorates and dispose of insolvent companies.
After ntally running through all the calculations, Chief Secretary Woo concluded there was nothing to lose and gave a firm nod.
"Very well. I'll still need the President's approval, but we'll proceed with selling the Gangnam City Hospital and the Korea Appraisal Board land to you."
Hearing the answer he had been waiting for, Seok-won smiled.
"In that case, as promised, I'll proceed with acquiring the Hyunwoo Group's financial subsidiaries."
Then, as if sothing had just occurred to him, he added:
"Oh, and while we're at it, I'd also like to acquire the shares of Hyunwoo Securities held by the other Hyunwoo affiliates. Would that be possible?"
Reflecting the typical web of cross-shareholdings among Korean conglorates, several Hyunwoo affiliates—including Hyunwoo Shipping, Hyunwoo Heavy Industries, and Mipo Shipbuilding—shared ownership of 20.2 percent of Hyunwoo Securities, which controlled the financial subsidiaries.
"Once you take the newly issued shares, your stake will rise to 23.7 percent. That's enough to exercise full managerial control."
"I'm aware. But instead of letting Hyunwoo remain the second-largest shareholder, it would be cleaner to acquire all their shares at once. That way, we eliminate any possibility of future complications."
It was a reasonable point.
And acquiring those additional shares would help Hyunwoo Group, which was struggling with liquidity issues.
In fact, from the governnt's standpoint—constantly wrestling with insolvent companies—this was more than welco.
Chief Secretary Woo Chun-il accepted imdiately.
"I'll make arrangents through the creditor banks so that you can purchase all the Hyunwoo affiliates' holdings."
"Thank you."
Relief washed over Woo Chun-il's face as he sipped his now-cold green tea.
"With your help, we've managed to resolve one of our biggest headaches. I should be thanking you."
"Think nothing of it."
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