“HBF?”
KJ Food, the largest player in South Korea’s food industry.
Chairman Han Minho raised an eyebrow as he looked at the invitation to an initial public offering (IPO) that had arrived from Yeouido.
“Yes. It’s Professor Park Huibong’s research team—the one we briefly discussed investing in before. That’s the name of the corporation they established.”
“I’m not asking because I don’t know that. Our conclusion was that they were drowning in deficits and commercialization would take more than a hundred years. And now these bastards are suddenly listing?”
“Yes. The underwriter is, in effect... the National Pension Fund. Looking at the shareholding structure, the pension fund holds a majority stake.”
Chairman Han let out a hollow laugh.
No wonder a listing procedure that should easily take at least two years had ended in two weeks. Their backing was the pension fund.
“So the pension fund is throwing another money party, is it? These guys are drowning in red ink. It’s obvious they’ll be delisted within two years even if they list, and they’re helping with this trash? Even ignoring procedures?”
“Actually... they followed all the procedures. It’s a technology-special listing.”
“What?”
“Because it’s a special listing, they’re exempt from revenue requirements for five years.”
In order to promote the venture industry and foster small but strong enterprises, the Korean government has various exceptions built into the listing process.
One of them is the technology-special listing.
Companies listed through the special system enjoy various exemptions in terms of capital, company size, and the like, and are also free from revenue requirements for five years.
Their circumstances are better than ordinary companies that must plunge into a war of performance the moment they list.
“That doesn’t change anything.”
But Chairman Han was still cynical.
“Give them fifty years, not five, and they’ll still end up delisted. Just try permitting cultured meat for public distribution. Gwanghwamun will turn into a sea of cows and chickens. Even we, a private company, can see the future plain as day, so why is the pension fund investing in such a ridiculous place? If they’re going to do that, they should buy more of our shares. Tsk, tsk.”
“Th-that’s true.”
“Why did they call in the major food companies separately?”
“Professor Park wants to explain the company vision...”
“Enough of that pointless talk. It’s money, isn’t it?”
“...Yes. They say they want to block-deal 10% of the pension fund’s stake and 10% of Professor Park’s stake to corporations.”
“These people are treating companies like suckers, aren’t they? A 20% stake means they’re telling us not to interfere with management and just hand over investment money. Do they think we’re idiots?”
“...But other major companies like Damwon, Palmuwon, and Ottogi have expressed their intent to participate.”
“Wh-what?”
“They say officials from the Ministry of Agriculture, the Ministry of Science and ICT, and the Small and Medium Business Administration will also attend the IPO event... Since it can’t only be about money, I suspect there will also be requests for institutional support.”
Chairman Han sprang to his feet.
If government officials were attending, that was a different story.
“N-no way. Public distribution of cultured meat is absolutely impossible in Korea. There’s no way that’ll happen!”
“...What should we do? Shall we send someone around the president level?”
“Damn it!”
Chairman Han’s mind grew complicated.
The move was obvious. Gathering the major companies before listing was a tool to create buzz.
With HBF’s current financial condition, it was obvious it would be a penny stock. Selling stakes to major corporations before that could only be a way to secure corporate credibility and drum up excitement for the public subscription.
“Why on earth...”
But he was beginning to feel confused.
Why were government officials personally dragging their heavy feet to this IPO? When you sent those people a “Happy New Year” text on Lunar New Year, they only replied around Chuseok the following year, so why were they being so diligent about a venture company’s IPO?
“It’s probably because of the pension fund... It’s practically the same as if they invited them to the event.”
“Damn it. Money really is a gangster.”
“What shall we do, Chairman?”
“When did you say it was scheduled?”
“Tomorrow at eleven. The public subscription is next week.”
Chairman Han looked at his schedule and said,
“Clear my schedule for tomorrow. I’ll go myself.”
If cultured meat was permitted for distribution on the market, the landscape of the industry would change. This seemed like something he needed to go see for himself.
*
Nine o’clock, two hours before the company presentation.
Professor Park and his research team could not hide their nervousness.
Once next week came, the public subscription would begin in earnest. But the outlook was not particularly bright.
Usually, major IPOs start building hype a month before subscription. All kinds of news pours out, and riding that heat, the subscription competition rate reaches at least several hundred to one.
Then, on the day of listing, the stock hits the daily upper limit, and the next day it hits the upper limit again... Achieving what is commonly called a “ttasang,” the company’s size doubles in an instant.
But there were no signs of any of that for HBF.
The United States had already begun public distribution, but for Koreans, cultured meat was still an unfamiliar concept.
Even if they overcame their deficit and succeeded in developing the technology, it would still be a problem. With all kinds of institutions and interest groups watching with their eyes wide open, public distribution was out of the question.
Who would take interest in a company like this?
I approached Professor Park, who could not stay still for even a moment.
“Professor. Did you sleep well last night?”
“Ah, Supervisor Lee, you’re here.”
“Relax. I’ll never forget how confident you were when you and I debated in the United States. You look impressive when you’re confident, Professor.”
Professor Park smiled bitterly.
“The worlds of research and management really are different. To think the research achievements we’ve made so far have to be evaluated in terms of price... I’m a little worried. Judging by the mood, it feels like we’ll fall into a penny stock the moment we list.”
“So what if that happens? Either way, the funds needed for research and development will come in.”
“Even so, there’s a minimum level a listed company has to maintain...”
“A technology-special listing defers revenue data for five years anyway. I firmly believe you’ll achieve a technological innovation within that time, Professor. Fighting!”
Just as I was about to leave, he called me.
“Thank you, Supervisor Lee.”
“Yes?”
“I’m a desk-bound academic who’s been cooped up in a lab, so I don’t know the nature of these companies. Thank you for inviting major corporations before the listing, and even more for inviting government officials. It’s probably because of that that the major food companies are showing this kind of interest.”
With a determined face, he clenched his fist.
“I’ll make sure to live up to those expectations!”
*
“All physicists say the same thing. Humanity will soon be eating insects.”
Eleven in the morning.
Once the company presentation began, Professor Park’s eyes changed completely.
It seemed my worries had been for nothing.
It was an extremely burdensome event, attended by representatives of major corporations and even government officials, but Professor Park was captivating the audience like a fish in water.
And naturally so, because today was an extremely important occasion.
Daehan Asset was currently tasked with the difficult homework of predicting public subscription demand and deciding the offering price.
But interest in the public offering was far too cold. The reality that not even a single line had appeared in the news said everything. Almost no one believed the cultured meat business would succeed in Korea.
That was why the block deal was our final opportunity.
The National Pension Fund and Professor Park had each put up 10% of their stakes to sell first to major food corporations. The price of this 20% stake to be bid on today was, in effect, no different from the offering price.
But if there were no winning bidder, HBF would have to start as a penny stock.
“Then, allow me to explain the outlook for cultured meat.”
The company presentation, which had begun with climate change, soon moved on to the main point.
“This chart you’re looking at now shows the amount of methane gas humanity must pay to obtain 100 grams of beef. Conversely, this chart shows the amount of carbon generated by 100 grams of cultured meat. This is precisely why I call cultured meat a future food business.”
Europe was currently so obsessed with low carbon that people were even talking about introducing a fart tax. When livestock are raised, their manure emits enormous amounts of methane gas and carbon, which are the main culprits of global warming.
But the amount of carbon generated by cultured meat was less than half of that.
Of course, in this world, there were products much cheaper than cultured meat, with lower carbon emissions, and even more environmentally friendly.
“Humanity must now choose. Will we eat insects, or will we eat cultured meat? But I predict that humans will not give up meat.”
When the smooth explanation ended and the company presentation reached its conclusion, Professor Park said with emphasis,
“So far, I have highlighted only the economic aspect... but in truth, this is not simply a matter of food. It is a matter of security, of food sovereignty, and of strategic assets. Cultured meat will free us not only from environmental problems, but also from our fundamental anxiety over food security.”
This is such an important issue, so please give us some institutional support, you fools!
His final remarks were clearly aimed at the government officials.
When the presentation ended, contrary to everyone’s expectations, an official from the Ministry of Agriculture raised his hand.
“Professor. Thank you for the explanation. To hear that even the United States showed investment interest in a domestic research team’s technology... It’s truly surprising. However, one thing. Ultimately, it sounds like the production cost issue has still not been resolved. Your presentation came across as saying that the state should provide institutional support. Is that correct?”
“There is, in fact, that aspect.”
“I find that difficult to understand. Why should the state support a private company’s product development?”
“Allow me to reframe the question. Why does the global community provide enormous subsidies for electric vehicles?”
As if understanding his meaning, the Ministry of Agriculture official smiled.
“In truth, if not for subsidies, the electric vehicle market would never have formed as it is now. They have no competitiveness at all compared to internal combustion vehicles. Likewise, raising the cost issue now is too harsh on cultured meat research. Under the macro goal of carbon reduction, I would like the Ministry of Agriculture to also provide research funding support.”
“I see. Then allow me to ask one more question.”
“Yes.”
“Ultimately, your company presentation seems to say... that HBF will only turn a profit if public distribution of cultured meat is permitted in Korea. Conversely, if this public distribution is not permitted, you will have no choice but to continue operating at a loss. Is that correct?”
“That is correct.”
“However, we do not have the authority to decide that. That authority lies with the National Assembly and the government.”
The Ministry of Agriculture official had put his finger on the sorest spot. Everyone held their breath and watched the conversation between the two.
“Ultimately, this means HBF’s fate depends not on research results, but on the government’s course of action... If the government does not grant permission, how do you intend to operate the company?”
This was the greatest mountain before Professor Park Huibong’s research team. Even if they achieved a cost breakthrough, what would they do if the government refused to permit distribution?
But Professor Park had already made his decision.
“There is a joke among academics and researchers. The place that recognizes my worth is my homeland.”
“What do you mean by that...”
“If our research team possesses the technology, but it falls apart for institutional reasons, I will leave Korea without hesitation.”
“...!”
“I don’t know whether it will be the United States or Europe, but the place that values me more highly will be my homeland. In fact, as far as I know, when a small or medium-sized enterprise sells a stake to a major corporation, its stock price soars through the roof. Even more so if that corporation is American, no?”
Professor Park spoke with force.
“Whatever happens, I will not allow the people who believed in me and invested to suffer a loss.”
When his bold answer ended, the Ministry of Agriculture official asked no more questions. Everything that could be heard had been heard. Now it was time for the businessmen.
After gauging the mood for a while, the representatives of the major corporations suddenly began raising their hands one after another.
“How much do you value the 20% stake at?”
“What is the sale procedure? Is it an auction? Or a highest-price competitive bid?”
“I’m curious about what you discussed with Tysun... Could you tell us about that separately?”
Watching the representatives show competitive interest, I was certain. Professor Park’s company presentation today had been a success.
I clenched both fists tightly.
Now all that remained was for this heat to carry over into next week’s subscription.