Court Extends Homeplus Restructuring Plan Deadline by Two Months as Express Sale Nears

A South Korean court extended the deadline for Homeplus to win approval of its rehabilitation plan by about two months, citing progress in the sale of its Homeplus Express supermarket unit. The company is expected to sign a share purchase agreement, or SPA, with preferred bidder Harim Group (NS Home Shopping) as early as next week.
 
The Seoul Rehabilitation Court’s Rehabilitation Division 4, headed by Chief Judge Jeong Jun-young, on Wednesday moved the approval deadline to July 3 from May 4. The court said it needed time for the Express sale process and follow-up steps to be properly completed.
 
The court noted that a preferred bidder has been selected and the transfer agreement is pending, and that Homeplus’ administrator has said the company plans to secure additional emergency operating funds through debtor-in-possession, or DIP, financing once the deal is signed.
 
Homeplus applied for rehabilitation proceedings in March last year as part of a preemptive restructuring, and the court promptly opened the case. In December, the administrator submitted a restructuring-focused plan that included 300 billion won in new borrowing through DIP financing and the sale of the supermarket business unit.
 
Under the rules, the plan was originally due for approval by March 4, one year after the court opened the proceedings. The court granted a first extension, citing the need to confirm the status of the Express sale. On April 23, Homeplus and its sale adviser, Samil PwC, selected Harim Group as the preferred bidder.
 
With the court’s extension approved, Homeplus and Harim are expected to finalize the SPA as early as next week, according to industry sources. Even if the contract is signed, Homeplus said there will be a lag before sale proceeds reach the company, leaving it under acute cash pressure.
 
After more than 14 months in rehabilitation, Homeplus said it is already facing a severe funding crunch. The 100 billion won previously injected by its controlling shareholder, MBK Partners, has been fully used to pay overdue utility bills and employee wages for January and February. With supply disruptions and falling sales accumulating, the company has also failed to pay wages for March and April on time, raising concerns about maintaining operations at its core hypermarket business.
 
Homeplus said it has formally requested emergency funding from Meritz Financial Group, its largest creditor, which holds most of the company’s key real estate assets as trust collateral.
 
“At this point, the only realistic entity that can quickly provide large-scale liquidity is effectively Meritz Financial Group,” Homeplus said. It added that a bridge loan and DIP financing, with recovery of Express sale proceeds expected, are “essential financial measures” to keep the rehabilitation process on track.
 
The company said completing the Express sale and restructuring is “the most realistic path” to maximize creditor recoveries, and urged Meritz to make a swift, forward-looking decision that considers both recoverability and rehabilitation value.