Homeplus Faces Uncertainty Despite Sale of Express Division

NS Shopping, a subsidiary of Harim Group, has received approval from the Fair Trade Commission to acquire Homeplus Express for 120.6 billion won, allowing Homeplus to accelerate the sale of its remaining divisions. However, with less than three weeks until the deadline for its rehabilitation plan, uncertainty remains due to unresolved issues surrounding emergency operating funds.

According to industry sources on June 14, the Fair Trade Commission completed its review of NS Shopping's acquisition of Homeplus Express within a month of the application, considering Homeplus's ongoing rehabilitation process.

With this approval, NS Shopping has rapidly expanded its offline retail network across the country. Homeplus also aims to simplify its structure through the sale of Express, focusing on its hypermarkets, online operations, and headquarters.

Homeplus believes this sale will reduce the burden on future buyers. With a streamlined business structure and a reduced workforce from over 18,000 to around 9,000 employees, the company sees increased attractiveness for potential acquirers. Homeplus is committed to establishing a foundation for its rehabilitation plan through the sale of its remaining divisions.

However, the sale of Express alone does not eliminate the uncertainty surrounding Homeplus's rehabilitation. The proceeds from the sale may be limited in their use for debt repayment, leaving the company with restricted available funds.

Furthermore, the need for emergency operating funds to normalize operations remains unresolved. Homeplus has stated that it requires 200 billion won in DIP financing for its rehabilitation. This amount is deemed necessary to enhance store efficiency, stabilize product supply, and restore trust with suppliers.

In contrast, Meritz Financial Group, the largest creditor, is reportedly considering a loan support of 100 billion won. This support is contingent upon guarantees from MBK Partners, the private equity firm that holds a stake in Homeplus, as well as from Chairman Kim Byung-joo. It remains uncertain whether this funding will materialize. Even if the 100 billion won is provided, it falls short of the 200 billion won Homeplus is seeking.

The timeline for rehabilitation is tight. Homeplus must finalize its rehabilitation plan by July 3. By this date, it needs to secure DIP financing, select potential buyers, submit a revised rehabilitation plan, and complete creditor agreement procedures. If an agreement is not reached within this timeframe, liquidation could become a possibility.

Homeplus has reiterated its commitment to normalization. A company representative stated, "We are making every effort towards normalization, including closing 37 stores, and the union is also accepting wage sacrifices and restructuring. The deadline for the rehabilitation process is July 3, and even if extended, it must be successfully concluded before September 3, making it a critical situation." The representative added, "We earnestly request that Meritz Financial Group make a decisive commitment to provide 200 billion won in emergency operating funds."