Reborn since 1993

Chapter 816 Cutting

The entire Daewoo Group has borrowed more than 497 billion USD from Korean banks and overseas banks. Previously, they basically borrowed new money to repay old debts. Hmm, does it look familiar? The small loan companies that eat people without leaving any bones and the credit card cash-out companies also do this...

However, Daewoo is a much bigger company than one person can handle. Originally, these debts seemed huge, but as long as Daewoo could borrow money, the annual income would be enough to pay the interest and it could continue.

As long as Daewoo continues to expand and its revenue continues to increase, this game can continue. In the end, it will either make money to repay its debts or issue stocks, bonds, etc. to slowly repay its debts.

But when Korean banks had no money to lend to Daewoo and overseas banks refused to rescue Daewoo, Daewoo, which had swelled up and looked like a huge behemoth, finally collapsed!

Even if it does not declare bankruptcy now, it is just struggling to survive and delaying time. Under the constant debt collection of creditors, Daewoo can only sell off its assets to pay off its debts. When there is nothing left to sell, what else can it do except bankruptcy.

"The Korean stock market index has fallen by more than 61%, reaching its lowest level in ten years!"

"The won-dollar exchange rate has fallen to 1891 to the dollar, a 1% depreciation from the same period last year."

"In some areas of Seoul, property prices have been cut in half, and the number of listings has hit a record high!"

"International hedge funds are still shorting the Korean stock market, foreign exchange, and real estate market. There are rumors that international hedge funds have made more than $4 billion in profits in Korea."

"The Korean central bank admitted that its foreign exchange reserves have been exhausted. Currently, the six major banks in Korea are seeking support from overseas institutions!"

"The finance chief of Korea called on the people of Korea to stand up and help the country in times of crisis, donate gold bars and other items to the city government of Korea, and help Korea stabilize the foreign exchange market."

"After Hanbo and Daewoo announced debt defaults, a number of Korean companies including Kia Group, Sammi, Jinro, Dainong, Midobo Department Store, and Haitai Foods have applied to the Korean court to enter bankruptcy protection procedures!"

"Another Korean giant, Samsung, announced that it would lay off 180 employees and prepare to close or sell more than companies to cope with $ billion in debt!"

"According to Japanese media such as the Asahi Shimbun, in order to avoid national bankruptcy, South Korea may choose to seek help from the United States and the International Monetary Fund!"

The central media television stations have been reporting news from Korea and Southeast Asia in recent days. Even the news reported by the central media has been screened and reviewed, and some large-scale news cannot be reported.

But from the news reported by the central media, we can see that the whole of South Korea has reached the end of its rope.

One after another, Korean giant companies collapsed, and those that survived were desperately selling off their companies and laying off employees just to survive a few more days.

The desperate city government of Korea has begun to call on Koreans to donate their gold and silver jewelry to stabilize foreign exchange.

These actions seem tragic, but they are of no use. When a country is facing bankruptcy, the power of one person is too small.

Not to mention, the truly wealthy chaebol families in Korea had no intention of dying together with Korea at this time. Although the giant companies were facing bankruptcy, the members of those chaebol families continued to transfer US dollars, gold, and antiques overseas. Even if the company went bankrupt, it would not affect the chaebol families' continued superior life overseas.

……

"The stick is really finished!"

Inside BBK Electronics, all the senior executives were still frightened by the tragic situation of the Koreans reported in the media.

Shen Wei watched the news on TV. Thousands of companies in South Korea are going bankrupt every day.

If this continues, the number of bankruptcies of Korea's big chaebols and small companies combined may reach 10,000 or 20,000, and at least two to three million people in Korea may be directly unemployed.

The key point is that South Korea has such a small population. Such an unemployment rate is already equivalent to a horror story.

Moreover, the current social welfare in Korea is far from being as developed as that in later generations, and it is impossible to have a special system for distributing food to slum communities and homeless people like America in the past, which can keep these people alive to a minimum.

As long as people are not hungry, they will not do anything extreme. But when they can't survive, they can do anything.

Now the public security in Korea is in complete chaos, just like Siam before. There are more and more people who have gone bankrupt due to unemployment, and whose houses have been taken away, whose wives have left them, and whose families have been separated and who have ended up living in parks. There is also a surge in the number of young people who have dropped out of school and run away from home due to family changes. This has led to a constant stream of people protesting on the streets of Korea because they are dissatisfied with being laid off. Bank robberies, store robberies, fights and other incidents are also emerging one after another.

South Korea is completely finished. This is something that anyone with a discerning eye can see. No matter how hard the South Korean city government tries to defend itself, these are the facts.

Shen Wei and other BBK executives couldn't help but look towards Duan Yongping. The domestic market has also begun to be affected. Many companies with tight capital chains have begun to complain and are facing the risk of bankruptcy.

Including the electronics industry, companies that expanded aggressively before are now busy saving themselves, and even companies like OZing are waiting to die.

In contrast, because of Duan Yongping's order, BBK did not act radically. Instead, it recovered a lot of payment in advance and borrowed some from the bank. Now BBK's capital chain is not very sufficient, but it is not difficult for it to get through the trouble in Southeast Asia!
Duan Yongping did not show any excitement despite the admiring looks of Shen Wei and other disciples. His brows were still furrowed. This time he was just following the rules and following behind Dongling Hi-Tech.

What is happening now has once again proved the foresight of Dongling Hi-Tech. It can almost be said that it predicted this wave in advance and suspended its business in Southeast Asia. Some media previously said that it was a stupid move, but now it can be said to be a stroke of genius.

Duan Yongping sighed, "The Koreans are finished. The foreign exchange in Malaysia, Singapore, Indonesia and other places will definitely not be able to be maintained. Even Japan and Hong Kong may be affected.

The domestic market may also experience some turmoil, and I don’t know when it will recover!”

BBK's current market is still mainly in China, but the domestic market will definitely be affected as well. It is impossible that there will be no impact at all.

Duan Yongping feels that the domestic electronics, home appliances, and electrical appliances industries are likely to be in a downturn this year, and BBK's revenue is expected to be greatly reduced this year.

Although he was depressed, Duan Yongping also knew that it was already quite good to survive a storm of this scale. As long as the green mountains remain, there will be firewood to burn. If the chaebol giants like those in South Korea die, everything will be gone!

When Korea was lost, foreign exchange was depleted, and chaebol giants went bankrupt one after another, and international hedge funds led by Soros were basically allowed to continuously enter and exit Korea to reap the benefits, the entire Southeast Asia and even the Asian region basically saw a buy-back plunge. Only the exchange rates in mainland China, Japan, Hong Kong and other places could be maintained, while the exchange rates in other regions could not be maintained at all.

When Southeast Asia began to fall into chaos, the country suddenly felt the arrival of a cold winter. Some small factories began to close down, and orders from large companies began to plummet. They had to stop production or even lay off employees.

However, in order to avoid risks, banks have begun to continuously recover loans, fearing that those companies will go bankrupt and the loaned money will become bad debts. This has made life suddenly difficult for many domestic companies.

Just when domestic companies began to wail, a statement from Dongling Hi-Tech sparked public opinion.

"Dongling Hi-Tech announced that the parent company and its subsidiaries, such as Feiyan Technology and Dongxin Semiconductor, will temporarily adjust the payment settlement period for component suppliers to 35 days, with a total adjustment period of ten months!

In addition, Dongling Hi-Tech announced that it would provide its suppliers with the first interest-free loan in RMB of approximately US$1 billion to help parts suppliers tide over the difficulties. It is not ruled out that Dongling Hi-Tech will provide suppliers with larger-scale loans in the future!

Ren Yuefeng, general manager of Dongling Hi-Tech, announced at a Dongling Hi-Tech supplier conference call held today that Dongling Hi-Tech will stand together with all suppliers! "

When Dongling Hi-Tech announced the news and deposited the cash into a special bank account under the witness of the Economic and Trade Commission, State-owned Assets, Hanxi Provincial Government, and Pingyang Municipal Government, everyone understood that Dongling Hi-Tech was not joking!

While other companies in Southeast Asia, as well as domestic companies, were struggling to survive, Dongling Hi-Tech actually took the initiative to shorten the payment cycle and provide interest-free loans to suppliers!

You know, all major companies nowadays are trying desperately to delay the settlement cycle. It is not uncommon to have a supplier settlement cycle of half a year or even a year. This is to keep the cash flow in hand to deal with risks.

In this case, Dongling Hi-Tech’s 35-day settlement cycle is just short of daily settlement for those suppliers!

Even if there is no daily settlement, the interest-free loans are enough to keep those suppliers alive. To be honest, if they can't even last a month and can't survive with the money borrowed from Dongling Hi-Tech, then there is no need for them to survive. I guess even the bank can't save them!

When seeing these news, countless companies began to feel jealous. At this moment, the envy of Dongling Hi-Tech's parts industry chain companies has reached its peak!
In the past, I only knew that there was meat to be made by following Dongling Hi-Tech, and that if I could join Dongling Hi-Tech’s parts industry chain, I would never lack orders.

But now, countless domestic companies have realized that holding on to a big golden leg can save their lives at the critical moment!
When the news came out, countless domestic companies flocked to Hanxi all of a sudden, wanting to cling to Dongling Hi-Tech's big legs and help their companies get through the difficulties.

However, a piece of news came out later, which made many domestic companies begin to understand why Dongling Hi-Tech provided loans to suppliers.

The first company to receive an interest-free loan from Dongling Hi-Tech was BYD. BYD then announced that it would begin expanding its production capacity to seize the market after having cut prices by 30% in the nickel battery market!
(End of this chapter)