Homeplus Rehabilitation Plan to Face Vote at Creditors' Meeting Today, Deciding Its Fate

Homeplus, currently undergoing corporate rehabilitation procedures (court receivership), will put its rehabilitation plan to a vote at a creditors' meeting today (September 2).

With the vote just a day away, the retail industry leans toward the observation that the rehabilitation plan is likely to be passed barring any major variables.

This assessment is based on the belief that major stakeholders are likely to vote in favor, as debtor-in-possession (DIP) financing was injected through a guarantee by MBK Partners Chairman Kim Byung-joo, and Homeplus continues to operate relatively well.

However, the approval rate among suppliers regarding the installment repayment of more than 500 billion won in unpaid settlement dues remains a variable.

The Seoul Bankruptcy Court will verify consent to the rehabilitation plan by group—including holders of secured rehabilitation rights, rehabilitation claimholders, and shareholders—starting at 3 PM today.

Passage requires approval from at least 75 percent of the secured rehabilitation rights group, at least 66.7 percent of the rehabilitation claimholders group, and at least 50 percent of the shareholders group.

Separately, the court plans to check the approval rates for installment repayments from public interest claimholders, such as suppliers and employees.

Unpaid dues to suppliers are public interest claims that must be paid regardless of the rehabilitation procedure, and these suppliers do not hold voting rights at the creditors' meeting.

However, because public interest claims must be paid prior to other rehabilitation claims, demands from suppliers for immediate payment of public interest claims could impose a burden on Homeplus's normal operations and execution of the rehabilitation plan.

For this reason, the court reportedly asked Homeplus to secure consent from public interest claimholders regarding the rehabilitation plan.

According to Homeplus, as of August 31, the consent rate for the installment repayment of public interest claims stood at 59 percent, with 64.4 percent of merchandise claim creditors and 87.9 percent of employees agreeing.

Subordinated bond victims, such as holders of Homeplus short-term electronic bonds (ABSTB) for merchandise purchases, are also protesting, holding a press conference in front of the court just prior to the creditors' meeting to the effect that they cannot agree to the current rehabilitation plan.

In particular, as opinions among stakeholders regarding the rehabilitation plan are divided, the upcoming creditors' meeting is raising possibilities of being considerably prolonged.

If the creditors' meeting drags on, it could affect not only the voting on the rehabilitation plan but also the timing of the court's approval decision.

If the rehabilitation plan is passed at the creditors' meeting, it will proceed to the court's approval process.

While there are many cases where the court issues an approval decision on the same day if a plan is passed at a creditors' meeting, the approval decision may not be made on the same day if the meeting is prolonged.

On the other hand, if voted down, the court may comprehensively review the feasibility of the rehabilitation plan and decide on a forced approval or the discontinuation of the rehabilitation procedure.

While the creditors' meeting could be reconvened if certain requirements are met, the actual likelihood of reopening the meeting is considered low as the deadline for passage is until September 4.

Once the rehabilitation plan is approved, Homeplus plans to improve its financial structure and embark on operational normalization through additional financing and store sales.
※ Please note: This article was translated by AI and may contain errors.