Homeplus Faces Potential Bankruptcy; Securing 200 Billion Won Within Two Weeks Is Key

[Anchor]

Homeplus, once the second-largest hypermarket chain in the industry, has been pushed to the brink of bankruptcy. The critical issue is securing 200 billion won in funds within two weeks, but the major shareholder, MBK Partners, and the largest creditor, Meritz Financial Group, are failing to present a solution and are instead shifting responsibility onto each other.

Our first report is from reporter Kim Hye-min.

[Reporter]

The Seoul Bankruptcy Court has terminated the rehabilitation proceedings for Homeplus.

The failure to secure 200 billion won in operating funds was the deciding factor.

The court stated that while MBK Partners, the private equity firm that is the major shareholder of Homeplus, claimed that at least 200 billion won in external funding was needed for rehabilitation, it only stated that it was making efforts without submitting any concrete or realistic documentation.

Homeplus saw its sales plummet as online retail grew during the COVID-19 pandemic, and after credit rating agencies downgraded its credit rating, the company filed for rehabilitation proceedings in March of last year.

During the rehabilitation process, an assessment even suggested that liquidating Homeplus would have an economic value over 1 trillion won higher than maintaining it.

Although MBK Partners sold the Homeplus Express business division and reduced the number of stores, the company has been unable to pay employee salaries or settle payments to suppliers since last month.

With bankruptcy imminent due to the court's decision, MBK Partners and the largest creditor, Meritz Financial Group, are merely blaming each other.

Meritz claims that it deposited a loan of 100 billion won on the condition of joint guarantees from MBK and Chairman Kim Byung-ju, and that MBK must secure the remaining 100 billion won.

In contrast, MBK countered that while it is willing to provide a joint guarantee for 100 billion won, it does not have the capacity to secure or guarantee the remaining 100 billion won.

[Interview] Kang Woo-chul / Chairman of the Korean Mart Industry Union, KCTU: If they continue to run on parallel lines, it will ultimately lead to liquidation. If that happens, 100,000 workers and small business owners will be left out on the street. Shouldn't the government intervene in this?

Homeplus can file an immediate appeal against the court's decision within 14 days.

If Homeplus succeeds in raising the 200 billion won during this period, the resumption of rehabilitation proceedings is possible.

If the company fails to secure the funds and even gives up on the appeal, it could enter bankruptcy proceedings.

(Video coverage: Bae Moon-san, Yang Hyun-chul | Video editing: Choi Hye-young | Graphics: Jang Seong-beom, Kim Min-young, Kang Yoon-jung)
※ Please note: This article was translated by AI and may contain errors.