After 58 years, the Seul family is relinquishing management rights of their company, Taihan Electric Wire, Korea’s second-largest cable maker behind LS Cable with nearly 25 percent of market share

Seul family ends its management

Founder’s grandson resigns as president of Taihan Electric Wire

BY JOO KYUNG-DON [kjoo@joongang.co.kr]

Oct 09,2013

After 58 years, the Seul family is relinquishing management rights of their company, Taihan Electric Wire, after President Seul Yoon-suk, who is the grandson of company founder Seul Kyung-dong, stepped down Monday.  Taihan said Seul decided he might be a barrier to normalization of the cash-strapped company and left after discussions with creditors to protect employees and shareholders’ profits.

“It wasn’t an easy decision to leave a company that my father and grandfather have built for more than 50 years,” Seul said in a release. “I hope employees can show their potential and talents again like they have been doing until this day.”
Taihan, founded in 1955, had never lost money, but the company started to decline in 2004 after Chairman Seul Won-ryang, father of Seul Yoon-suk, died of a stroke. Seul’s wife entered management and eldest son Seul Yoon-suk, then 24, gave up his studies in the United States to return to the company.
Executive officers during that time were busy looking for new growth engines, and Taihan bought various leisure and real estate development companies. It also attempted to buy Italy’s largest cable maker, Prysmian, in 2008, taking on excessive loans. However, the failure to complete the acquisition and the 2008 global financial crisis left the company short of liquidity.
It signed a debt enhancement program with Hana Bank in May 2009. Seul, who at 29 became the youngest vice chairman among Korean conglomerates, led the restructuring process by selling more than 2.2 trillion won ($2 billion) of assets from 2009 to 2012.
Last February, Seul demoted himself from vice chairman to president and offered his stake in the company as collateral for additional funds.
According to a first-half financial report from Taihan, net losses were more than 154.4 billion won, while its ratio of capital erosion was 84 percent.
Seul will remain as a shareholder of the company, but will not be involved in business operations. According to the company, Taihan has been operating with two chief executives, so it will be able to absorb the absence of Seul.
Industry insiders speculate that Chairman Son Kwan-ho, who joined the company in 2010 from SK Engineering and Construction, will manage the company’s financial restructuring, while President Kang Hee-jeon will manage overall operations.
The company, which is the nation’s second-largest cable maker behind LS Cable with nearly 25 percent of market share last year, said that although it still has more than 1.4 trillion won of debt, it is making progress in restructuring under a creditors’ plan.
Taihan’s main customers include Korea Electric Power Corporation, KT and Hanwha Chemical.
Taihan Electric mulls debt-to-equity conversion and split-off

Choi Ik-ho

2013.10.08 14:21:12

South Korea’s Taihan Electric Wire said Tuesday it is considering a creditor-led debt-to-equity conversion and split-off program to improve its financial conditions, but nothing has been decided.
The company’s share price faltered to the daily limit of 15% to 2,275 Tuesday.
Earlier, the company said its owner and head Seol Yoon-seok decided to give up his management right and step down from CEO to facilitate current restructuring efforts led by creditor banks.
Seol took office in 2004 after his father and chairman passed away suddenly.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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