Homeplus: Meritz Requires Immediate Repayment of Express Sale Proceeds

Homeplus, which is undergoing corporate rehabilitation, announced on May 18 that Meritz Financial Group has demanded immediate repayment of the proceeds from the sale of Homeplus Express as a condition for providing a short-term operating loan (bridge loan).

According to Homeplus, Meritz is considering a short-term operating loan of approximately 100 billion won ($75 million) for a duration of 2 to 3 months, with interest rates similar to those of existing emergency operating loans (DIP loans). The conditions also include personal guarantees from major shareholders MBK Partners and the management team.

In response, Homeplus has proposed using a second-ranking income right on real estate as collateral instead of personal guarantees. Homeplus stated, "The contract for the sale of Express has already been signed, and considering that the transaction will be completed by the end of next month, we have already provided personal guarantees for other operating funds." However, it appears that Homeplus is reviewing Meritz's loan conditions due to pressing issues such as unpaid wages and outstanding product payments.

Currently, Meritz holds collateral on 68 Homeplus stores. Proceeds from major real estate sales completed or in progress after the rehabilitation process are also being prioritized for repayment of Meritz's claims.

Meanwhile, as Homeplus continues to face financial difficulties, the labor union has also requested normalization of deliveries. The Homeplus General Labor Union recently decided to forgo wages and defer salary payments, sending a formal request to suppliers for the regular supply of goods. In the letter, the union stated, "Only with a smooth supply of goods to the stores can they be normalized, and only when the stores recover can the valuable delivery payments be fully repaid."