Homeplus Faces Uncertainty Ahead of Restructuring Deadline Amid Funding Disputes

Homeplus is facing uncertainty regarding its restructuring efforts as it struggles to secure emergency operating funds ahead of the July 3 deadline for its corporate rehabilitation plan. The largest shareholder, MBK Partners, and major creditor Meritz Financial Group are engaged in a blame game over financial responsibilities, hindering the normalization process. The court has instructed Homeplus to submit a plan for raising 200 billion won by June 30.

According to the retail industry on June 23, the deadline for Homeplus's restructuring plan is July 3. To implement the plan, the company needs 200 billion won in emergency operating funds (DIP) for expenses such as product payments, wages, and restructuring costs, but a funding solution has not been finalized.

DIP refers to new funds borrowed by companies undergoing rehabilitation to maintain operations. Homeplus requires immediate cash to normalize product supply and establish a foundation for revenue recovery, separate from debt restructuring. Without this funding, even if the rehabilitation plan is approved, actual normalization of operations is unlikely.

Meritz has proposed a conditional deposit of 100 billion won, stating that the remaining amount must be provided by MBK or a third-party investor. They also demanded joint guarantees from MBK and its chairman, Kim Byung-joo, as a condition for the loan. The logic is that the major shareholder must first demonstrate a commitment to rehabilitation through funding and guarantees before additional risks can be taken.

MBK has pushed back against these additional demands, stating that it has already provided funds and credit to Homeplus through personal contributions from Chairman Kim, loan guarantees, and external borrowing. Furthermore, MBK argues that since Meritz holds a senior security interest in Homeplus's real estate, it should prioritize financial support for rehabilitation over asset recovery.

As the court has demanded that Homeplus submit its 200 billion won funding plan by June 30, attention is focused on whether the ongoing disputes between the two parties will reach a resolution.

The operating conditions for Homeplus continue to deteriorate. The company has recently closed 37 stores that had ceased operations and is pursuing mergers and acquisitions for its hypermarkets and online and headquarters businesses, excluding Express.

The 120.6 billion won received from NS Home Shopping for the sale of Express is expected to be primarily used to settle existing debts, such as overdue payments and wages, leaving little room for new operating funds. Therefore, additional DIP loans are seen as a critical factor for rehabilitation.

A Homeplus representative stated, "If we secure operating funds, we can complete the ongoing structural innovations and establish a stable operational base to normalize in a timely manner." It was reported that the company has paid 75% of unpaid wages from April, as well as wages and shutdown allowances for May, to all employees.

However, for the court and creditors to accept the rehabilitation plan, the funding sources and debt repayment strategies must be presented in more detail. If an agreement is not reached by July 3, there are speculations that the court may extend the deadline to further assess the possibility of rehabilitation. The legal final deadline is September 3.

Conversely, if the likelihood of new funding is deemed low and the feasibility of the rehabilitation plan is insufficient, a transition to liquidation procedures cannot be ruled out. This would likely have a direct impact on numerous stakeholders, including Homeplus employees, suppliers, and small businesses that operate within its stores.

An industry insider noted, "If MBK and Meritz cannot find common ground on the 200 billion won funding arrangement, the clock for Homeplus's rehabilitation will tilt more quickly toward liquidation."