Homeplus's efforts to secure 100 billion won ($75 million) in emergency operational funding, known as DIP financing, have stalled due to disagreements over guarantee conditions. The deadline for approving the restructuring plan is approaching on July 3, but Meritz Financial Group's review of funding support is lagging as the scope of guarantees from MBK Partners and Chairman Kim Byung-joo remains unresolved.
As of June 16, financial sources indicate that MBK has not yet submitted any formal documents or specific plans regarding the joint guarantee for the 100 billion won DIP financing to Meritz Financial. DIP financing is new operational funding that companies undergoing restructuring can obtain with court approval.
Previously, Meritz Financial stated it would consider supporting the 100 billion won DIP financing based on guarantees from MBK and Chairman Kim Byung-joo after discussions with lawmakers, including Democratic Party members Yoo Dong-soo, Min Byung-deok, Kim Nam-kun, and Lee Kang-il. Although MBK has expressed a willingness to provide additional guarantees, no concrete negotiations regarding the required guarantee entities, scope, or legal effectiveness have progressed. A Meritz Financial representative noted, "We have not yet received any communication from MBK regarding the related procedures."
Meritz Financial has indicated that it is difficult to decide on loan execution without clarity on the guarantee scope and legal effectiveness. Concerns have also been raised that additional funding could lead to shareholder backlash and allegations of misappropriation. In fact, Meritz Financial shareholders previously submitted a letter opposing the support for Homeplus's DIP financing.
In contrast, MBK Partners and Homeplus argue that an additional 200 billion won is necessary for a stable conclusion to the restructuring process and normalization of operations. They cited a 16% increase in sales at Homeplus Express, recently sold to Harim Group, just ten days after resuming deliveries as evidence. They claim that once product supply is normalized, the remaining business can also recover quickly.
However, Meritz Financial believes it is challenging to inject additional funds without a confirmed guarantee for the initial 100 billion won support. There are also doubts about the effectiveness of new funding, especially since a significant portion of the 100 billion won in emergency operational funds lent directly by MBK in March was reportedly used for overdue salary payments.
The lack of alternative funding sources beyond Meritz Financial has intensified the blame game. Earlier this year, Homeplus requested 100 billion won contributions from MBK, the Korea Development Bank, and Meritz Financial in its restructuring plan submitted to the Seoul Bankruptcy Court. However, the Korea Development Bank has effectively declined, citing a lack of justification for injecting public funds since it is not a creditor.
Financial insiders are urging MBK, the largest shareholder, to take a more proactive approach in providing funds. The deadline for approving Homeplus's restructuring plan is July 3, with a final deadline of September 3 if extended. A corporate restructuring attorney remarked, "It is difficult for creditor Meritz Financial to take the initiative without a clear funding plan from the shareholder (MBK). If this situation continues, it is unlikely to reach a conclusion soon."
* This article has been translated by AI.
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