Meritz Financial Group expressed that it finds the court's decision to reject the rehabilitation plan for Homeplus "very regrettable," adding that it has yet to receive a definitive response regarding the personal guarantee from Kim Byung-ju, Chairman of MBK Partners, which was a key condition for its loan support.
In a statement released on the afternoon of July 3, Meritz said, "Meritz has hoped for Homeplus to normalize through the rehabilitation process, and we have played our role to the fullest extent permitted by law, including deferring the execution of collateral rights, cooperating on the early repayment of commercial claims, and placing 100 billion won in conditional Debtor-in-Possession (DIP) financing into escrow."
As the largest creditor of Homeplus, Meritz had previously announced its intention to provide 100 billion won in DIP financing, which accounts for half of the 200 billion won required for the rehabilitation plan.
However, Meritz required a guarantee from Chairman Kim Byung-ju, not just MBK, as a prerequisite for executing the loan. Meritz maintains that it has never received an official document from the company or Chairman Kim expressing such an intent.
Meritz stated, "Chairman Kim has not yet provided a guarantee for the 100 billion won in DIP financing offered by Meritz. It is difficult to avoid the criticism that the crisis at Homeplus is the disastrous result of management that has focused solely on recouping investments over the past 10 years. Even 15 months after the commencement of the rehabilitation process, the business environment and corporate value have only deteriorated further."
It is reported that MBK included a statement in an opinion letter sent to the rehabilitation court on June 30 indicating that Chairman Kim would provide a guarantee, which suggests that a dispute between Meritz and MBK is likely to continue.
Furthermore, Meritz limited its support to 100 billion won, citing that increasing high-risk loans could lead to charges of breach of trust against management due to shareholder backlash. Since MBK's position is that Meritz should provide 200 billion won if Chairman Kim provides a guarantee, the possibility remains that the two sides will not easily narrow their differences.
Meritz pointed out, "Over the remaining two weeks, MBK, as the largest shareholder and the party responsible for management, must not stop at recouping investment profits but must fulfill its rightful responsibilities. We hope they stop making unreasonable demands for creditors to break the law."
Meritz added, "We will actively cooperate in future procedures and work to ensure that damage to stakeholders, including Homeplus employees, partner companies, and small business owners, is minimized."