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176 Company Restructuring 4 – PART 1

 The internal auditor placed the storage building and the dormitory on the market for sale. The products piled up in the storage building were mostly returned products. Gun-Ho threw them all out without a second thought.

The internal auditor came to Gun-Ho's office and gave a report to him on a new location of their factory.

"A 5,000 pyung large factory came out on the market; it is located in Jiksan Town, Cheonan City. It was at first priced for 7 billion won, and after failing two attempts of sale at the auction, the price dropped to 3.4 billion won. Since the economy is currently not doing well, there are not many bidders at the auction. I looked into the current status of that factory; the building is a bit old but it has high electric power capacity."

"Okay. Let's buy the factory at the auction then."

"What about the funds to buy it with?"

"Sell the storage and the dormitory as soon as you can, so we can use the proceeds to buy the new factory. If we can't sell them in a short period of time, we will think of something else, then to find the funds to buy that factory with."

"Understood, sir."

Fortunately, the dormitory was quickly sold.

The workers from the management and the production department, who were living in the dormitory had to vacate their rooms; however, they received extra pay added to their salary as compensation.

"Find a place to stay on your own. You can rent a OneRoom nearby the company or move in with a relative or anything that works for you."

Some workers rented a OneRoom with the extra payment they received from the company and some moved into a OneRoomTel by adding their personal funds for the rent. However, there was no worker who would quit the job because of it.

The storage building was sold as well. The offer price was less than its appraised value, but Gun-Ho decided to sell it when there was a buyer who wanted the storage. The storage was sold for 2.4 billion won, and the dormitory was sold for 1.1 billion won. Gun-Ho bought the 5,000 pyung large factory in Jiksan Town, Cheonan City at the auction with the sales proceeds of these two buildings, which was 3.5 billion won in total.

The internal auditor entered Gun-Ho's office and asked,

"Shall we make a plan to move the factory?"

"No, we will build a new factory there before our moving; that factory building is over 20 years old and we will need a new building. It won't take much time."

"Are we building a new factory? But we don't have money to do it. We spent all of the proceeds we made by selling the storage and the dormitory in buying that factory."

"We can borrow money."

"Borrow money? From whom? We have more than enough debt, sir. No bank will lend us money."

"I will lend the money."

"Huh? You are lending the money to the company?"

"I will lend the amount of 2 billion won. However, once the main factory and the second factory where the research facility is located are sold, the company will have to pay me back."

The internal auditor looked at Gun-Ho with his mouth open.

'How much money does President Gun-Ho Goo have? 2 billion is a substantial amount of money, but he is talking like it was just pocket money.'

In the internal auditor's eyes, Gun-Ho looked like a mysterious man.

A few days later, Gun-Ho called for the internal auditor again to his office

"How much do you think it would cost to construct a new factory in the new location in Jiksan Town, Cheonan, which we purchased at the auction?"

"That factory is still usable. It would be a shame if we just demolish that factory building."

"Let's just make a plan to build a new factory and see what happens."

"The new factory would be nice but it will cost a lot. I was told that it would cost about 2 million won per pyung to build a decent factory."

"The land is 5,000 pyung large. Say, the new factory's ground floor area is 1,000 pyung large and we make it a two-story building, then the gross floor area will be 2,000 pyung. So if the construction cost per pyung is 2 million won, then we will need 4 billion won to build the two-story factory."

"That's right. It's too expensive. A big company might handle the cost, but we can't."

"Hmm."

"2,000 pyung factory is too expensive for us, sir. Why don't we make a one-story building? We can build another small building later for an office or a research center. We can also buy a shipping container building for an office later."

Gun-Ho was lost in thought for a moment, without responding to the internal auditor's suggestion.

"Umm, sir..."

"Yes?"

"To be honest with you..., building a factory is not my area of expertise. My area of expertise is a bank or money related matter. I think we need someone who knows about the construction of a factory."

"Hmm."

"I think it's time to hire a general director. The position has been vacant for too long."

"Hmm."

"I once worked on a case as a court officer for a construction company before. That company was eventually sold off in pieces, but I remember that the general director of that company was very good at what he was doing."

"He must be working in another company by now, right?"

"I am still in contact with him and he sometimes sent me a text message. I don't think he found a new job yet. He graduated from a good college, but since he is a bit old now, he seems to be having a hard time finding a new job."

"Hmm."

Gun-Ho was thinking with his arms closed, and asked the internal auditor,

"How old is he?"

"He is in his mid-50s. He is very competent and talented in his field."

"Hmm."

"He actually graduated from Seoul National University majoring in architecture, and he had worked in a big company. He usually worked at a construction field overseas for that company for a long time before he was laid off when the company was acquired by another company. He subsequently encountered a natural turf battle in the newly combined company and couldn't survive. He also didn't play the power game right either. So he moved to a small company with a position at an executive level."

"It was that small company that started the court receivership because they were inundated with debt."

"That's right. The company started building a large commercial building and borrowed way too much funds from banks in the process, which they later couldn't handle when they couldn't sell enough units. So the company went broke. One little misstep could result in a quick collapse of a construction company."

"He studied architecture and had worked in the construction field, but that is not really management work experience, right? Do you think he can handle the work of a general director? They are different fields."

"He worked as a general director in that small construction company. Because the company was so small, he practically took care of almost everything in general."

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"Hmm... Okay, I'd like to meet with him."

"Yes, sir."

"And also, I will add an additional 2 billion won to the company account for a new construction project of the factory in Jiksan Town."

"Huh? Another 2 billion won? Then, 4 billion won in total?"

The internal auditor was astonished by Gun-Ho's wealth.