00:00Corporate Korea is entering a costly phase. Shinsegae is boosting its debt and cutting
00:04investment. Lada Rental has delayed its first dollar bond. And Volkswagen just committed
00:095 trillion won to Georgia. It's Monday, October 26th. Let's look at a business story shaping
00:14corporate Korea. Shinsegae Group is betting heavily on its next phase of growth, and the
00:19financial bill is rising fast. Chairman Jung Young-jin has returned to head e-mart as a
00:23registered director after 13 years, and the group is expanding its portfolio through aggressive
00:28investment. Net debt at e-mart is expected to top 13.5 trillion won by the end of the third
00:33quarter. Here's what the numbers show. Net debt at e-mart is projected to exceed 13.5 trillion won
00:38by the third quarter, adding roughly 100 billion won in annual financing costs. Third quarter
00:43operating profit is forecast at 158 billion won, down 0.4% year-on-year, and about 11% below
00:50consensus. Nice credit rating expects e-mart's debt-to-equity ratio to climb from 133.7% to
00:57155.7%. Starbucks Korea, operated by SCK Company, is now a candidate for divestment,
01:04with a Japanese Starbucks business potentially valued at over 5 trillion won. Volkswagen is
01:08making a different kind of bet. The German automaker will build a $4.2 billion plant in Georgia,
01:14its largest single U.S. auto investment ever. Audi's flagship SUVs will roll off the line,
01:20adding 200,000 vehicles a year. Yet Audi's tariff bill last year reached 1.2 billion euros,
01:25and its U.S. sales fell 16% through September. In industrial energy, LG Electronics is testing a
01:311,000-ton class heat pump at a Daegu paper mill, targeting an estimated 2.5 billion won in annual
01:37energy savings. Meanwhile, U.S. 10-year treasury yields dropped below 5% for the first time in about
01:42a month, as investors moved out of tech stocks. Here's the common thread. Costs are rising from
01:47every direction, and the companies that act first will set the terms. So what does this mean for CEOs
01:52weighing their next board decision? For boards, the message is clear.
01:55E-Mart's leverage and the divestment talk around Starbucks Korea show how quickly a financing
01:59squeeze can force portfolio decisions. Volkswagen's Georgia plan shows that tariff exposure can be
02:05turned into a location strategy. And LG's heat pump shows that energy efficiency can offset rising
02:10operating costs. Earlier, we said that costs are rising from every direction. Here's what that
02:15actually means for you. Review your debt schedule, your tariff exposure, and your energy spend before
02:20your next board meeting. That's today's AI Prism, CEO. This episode was produced with AI assistants
02:25based on Seoul Economic Daily Reporting. AI Prism is a Juan Ifra award-winning series. We'll be back
02:31tomorrow.
