Homeplus Receives Court Approval for Rehabilitation Plan, Paving Way for Management Normalization

Homeplus, currently undergoing corporate rehabilitation, has successfully passed its rehabilitation plan and received court approval, marking a significant milestone. Last month, the company secured 200 billion won in emergency operating funds, allowing it to resume operations at 67 key stores, and now it has established a foundation for management normalization. If repayments are made as planned, the rehabilitation process will conclude.

The Seoul Bankruptcy Court's Rehabilitation Division held a meeting on September 2 to vote on Homeplus's rehabilitation plan, which was immediately approved after receiving the necessary votes. The secured creditors voted 100% in favor, while 75.9% of rehabilitation creditors and 100% of shareholders supported the plan. The approval requirements were at least 75% from secured creditors, 66.7% from rehabilitation creditors, and 50% from shareholders.

The court stated, "Considering that more than two-thirds of creditors agreed, we recognize that the rehabilitation plan meets the approval criteria."

With the court's approval, Homeplus can now proceed with debt repayment, additional fundraising, and store sales as part of its normalization efforts. The court plans to conclude the rehabilitation process once repayments begin as outlined in the plan.

In July, Homeplus faced a decision to terminate its rehabilitation process due to financial difficulties, but it managed to recover by securing a 200 billion won DIP loan from Meritz Financial Group, backed by a personal guarantee from Kim Byung-joo, chairman of MBK Partners. Following this, the termination decision was canceled, and operations at the temporarily closed 67 key stores resumed on August 13.

However, the approval of the rehabilitation plan does not guarantee normalization. Remaining challenges include the repayment of over 500 billion won in unpaid supplier debts and securing additional operating funds, as well as restoring store profitability. Kim Kwang-il, co-CEO of Homeplus and vice chairman of MBK Partners, noted that 66.3% of the public creditors have agreed to the repayment plan.

If repayments do not proceed as outlined in the rehabilitation plan, the court may decide to terminate the approval, which could lead to bankruptcy being declared by the court's authority, making the future of Homeplus dependent on the implementation of its plans.