As the 19th largest company in Korea, Jinro has as many as 24 affiliated companies, with total assets of 4 trillion won and a debt-to-capital ratio of 3,000 percent!!

Although the terms debt-to-asset ratio and debt-to-asset ratio differ by only one word, they are fundamentally different.

The gearing ratio is the ratio between liabilities and owners' equity, reflecting whether a company's assets are primarily financed or borrowed from shareholders.

The asset-liability ratio is the ratio of liabilities to assets, and we often say that insolvency will go bankrupt, which means that this ratio is more than 100%.

However, the two have one thing in common, both reflect the solvency of the enterprise, and the higher the ratio, the lower the solvency of the enterprise.

In other words, Jinro's own capital is less than 20 billion won, and the rest is all borrowed money!

In fact, it is not only Jinro, but the debt ratio of Korean companies has always been very high, and the average debt-to-capital ratio of large Korean companies has been ranked first in the world during the decades when Korea's economy has taken off.

Even Samki-san, the largest enterprise in Korea, has a debt-to-capital ratio of 365 percent!

The reason why large companies in Korea have such a high debt-to-capital ratio has a lot to do with the country's policy orientation and national character.

In terms of national character, Goryeo's national self-esteem is so strong that it is perverted, and in the final analysis, it is caused by the inferiority complex.

Goryeo has never had a truly independent history, which also makes the national pride of the people of this country extremely sensitive, for fear of being looked down upon by others.

Therefore, both the government and the people will constantly seek the so-called national superiority. This mentality is embodied in policy and economy, that is, to mobilize the strength of the whole country to make a few large companies in the world.

There are few companies in Korea that have grown from small to large step by step, and they have all done well in China and have become a worldwide multinational company in just a few years, which is inseparable from the almost unlimited financial, policy and national support in Korea.

Whether it's Miki-san, Hyundai, Daewoo, LG, Ssangyong, Hanjin。。。。。。 Rather, the financial structure of the enterprise is extremely deformed.

At a time when the economy is developing sustainedly and rapidly, the adverse impact of such a deformed financial structure on the operation of the enterprise is not obvious when the enterprise is relatively profitable. Once the economy is sluggish and the company's products are not selling well, the company's cash flow will soon have problems. Forcing companies to borrow from banks or short-term capital companies on harsh terms.

As a result, these enterprises will fall into a vicious circle of heavier debts and increasing interest burdens, and their financial structures will become very weak and vulnerable, and they will inevitably fall into the quagmire of bankruptcy in the face of economic fluctuations.

It has to be said that Jinro's announcement to file for bankruptcy protection will first affect the Korean stock market. After the announcement, the KOSPI index of the Korean stock market fell by 35 points.

Michael Barry's sense of smell is very keen, he has nearly 850 billion won in chips, a 250 billion won sell order smashed out, immediately smashed through the bottom pants of the won, the original part of the bet on the psychological price of 900:1 resistance was immediately destroyed, as of the close, the won exchange rate fell to the level of 915:1.

8% drop in a single day!

Zhang Chen and others' plan is divided into four steps: First, use US dollars, US bonds or other US dollar assets as pledges to obtain Korean won cash.

2. Establish a short position in stock index futures and sell KRW in the foreign exchange forward market to guide the market's depreciation expectation of KRW.

3. Since Korea is a financially liberalized country, when the panic of market depreciation reaches a certain level, it concentrates on exchanging Korean won for dollars to the central bank of Korea. However, Goryeo's foreign exchange reserves are limited, only $30 billion, and the available foreign exchange reserves are less than $27 billion.

Fourth, the stock index short contract is closed, the stock is bought and returned to the brokerage, the bond market is closed short, the loan is repaid with the Korean won in hand, and the remaining Korean won is left in the country or exchanged for foreign exchange, and the position is closed by buying Korean won in the foreign exchange forward market.

Although it seems complicated, in practical terms, to put it simply, it means that you first exchange 15 US dollars for 10,000 won, use 10,000 won as collateral, and borrow 100,000 won from someone else, because you already know that the exchange rate of Korean won will definitely fall, then I will exchange the borrowed money for US dollars, and after deducting the handling fee, you will exchange 140 US dollars.

When the exchange rate really drops, to a certain extent, you buy won again, and pay back to the person who lent you money, before 15 dollars can be exchanged for 10,000 won, now you only need to spend 10 dollars or less to sell it for 10,000 won, so you spend 100 dollars for 100,000 won and pay back to the creditor, at this time, you still have 50 dollars in your hand, but your principal is actually only the original 15 dollars.

Now that the plan has reached the third step, it depends on how long the Goryeo government resists and when the international community begins to save Goryeo.

In Zhang Chen's memory, the matter of Goryeo donating gold to save the country has been publicized for many years, and even Huaxia has reported on this feat of the Goryeo people.

It seems like three million people donated $2.2 billion in gold?

Zhang Chen was quite touched by the cohesion and patriotic enthusiasm of the Korean people, and it was unreasonable for a nation that loved the country so much to deprive them of their patriotic enthusiasm.

In order to make them love their nation even more, Zhang Chen decided to add another fire - exchange another $2.5 billion to the Central Bank of Korea the next day, and in three days, all 3.5 trillion won chips were exchanged.

Blue House.

"The Ministry of Finance must take full responsibility!" said Minister of Trade and Industry Woo Tae-hee, leaning forward, waving his arms and roaring with a flushed face.

Kim In-nok, chief economic secretary to the president, said sharply: "If the 13 financial reform proposals in March had not been rejected by you, this kind of thing would not have happened today!

Woo Tae-hee pointed at Kim In-nook: "What are you talking about? You bastard! The president appoints a villain like you as an economic secretary, and he simply doesn't know anyone!"

"Dr. Lin, what do you think?" Kim Yong-sam has become accustomed to arguing with the cabinet, and turned to consult economic adviser Lin Changyeol.

Lin Changlie's face was solemn: "President, I suggest that you apply for assistance from the IMF!"

As soon as Lin Changyeol's words fell, Woo Tae-hee spoke: "Bastard, do you want to make the face of our Republic of Korea lose to the world!"

Jin Yongsan waved his hand: "Dr. Lin, if we ask the IMF for help, what price do we need to pay?"

Lin Changlie was silent for a moment, and said with difficulty: "It may be a full opening, right?"

Kim Yong-sam asked, "What is the meaning of full opening-up?"

Lim Changyeol took a deep breath: "If you ask the IMF for emergency aid loans, it means that Goryeo's national economy will be taken over by the IMF, and the economic structure and economic policies will be adjusted in accordance with the requirements of the IMF, and the policy of opening up almost all industries including finance, steel, energy, and chemical industry will be implemented, and the upper limit on foreign investment must also be adjusted or even abolished." ”

Kim Yong-sam shouted, "Don't say it! Do you want me to be a sinner for the entire Goryeo nation!?"

Lin Changlie was silent for a while: "In just one day, the central bank has exchanged more than four billion US dollars, and if we continue to borrow to save the market, we can only hold on for about half a month." ”

Yu Tae-hee slapped the table: "You bastard! I have long recognized your true colors, you Goryeo traitor!"

Kim Yong-sam was furious: "Okay! Minister Li, inform KBS that I am going to make a public televised speech!"

Minister Li bowed slightly: "Yes, I will notify the arrangement immediately, what is the content of your speech?"

Kim Yong-sam had a calm face: "Secretary Kim, you come to draft, first of all, you need to apologize to all the people, secondly, stabilize the confidence of the people, tell everyone that today's incident is just an accident, we have the confidence and ability to stabilize the exchange rate, and finally, call on all the people to firmly hold the Korean won in their hands, by the way, don't forget to add some words calling on them to be patriotic." ”

Kim Rennuo nodded yes.

At the end of the meeting, everyone rushed out of the Blue House, and Kim Yong-sam suddenly said, "Dr. Lin, wait a minute, I have something to tell you." ”

Kang Kyung-sik and Kim In-nook glanced at each other, meaningful.

In fact, there is another theory about Goryeo's encounter in the Asian financial crisis, that is, Soros did not attack Goryeo at all, because Goryeo is an ally of the United States, and it is the so-called MZ society, so the international speculators did not hit Goryeo with a single bullet, so in 98, Kim Dae-jung also specially invited Soros to be a special adviser to ask how to deal with the financial crisis.

In addition, as soon as the financial crisis came, the financing channels of the Korean companies were blocked, their ability to repay their debts was greatly reduced, and the capital chain was broken, leading to a collapse.

This statement also explains why the United States saved Mexico, but not Goryeo, who can you blame if you die yourself? Moreover, with such a high debt ratio, lending money to them is obviously a meat bun beating a dog.

But there is a problem with this argument, and if it does, it basically does not explain where the initial large empty orders came from. Therefore, I am more inclined to the international speculator did attack Goryeo, but it was only a tentative attack, but I didn't expect Goryeo to be so unbeaten, and he himself punched himself to death with a false move.

Since Goryeo fell so quickly, only the initial group of shorts should have really made money.

(End of chapter)