Homeplus, the South Korean retailer undergoing court-led corporate rehabilitation, renewed its appeal Tuesday for emergency working capital, saying it has lowered the acquisition burden through the sale of its supermarket division, store realignment and organizational streamlining as it pursues "rehabilitation through a sale."
In materials distributed that day, Homeplus said, "Since the start of the rehabilitation process, the company has focused on improving business viability and profitability so that potential buyers can take interest."
According to Homeplus, its existing 126 hypermarket stores have been realigned around 67 core stores. For leased stores, the company reduced its rent burden to 20 to 40 percent of previous levels through negotiations with landlords.
Homeplus simplified its business structure by selling its supermarket division, Homeplus Express, to NS Shopping. Through this, its workforce was reduced from 18,000 employees to about 9,000.
Homeplus stressed, "The most urgent task at present is to secure working capital that allows us to maintain stable operations and complete structural innovation until the sale process is finalized." The company estimates the emergency working capital needed for normal business activities, such as purchasing goods and paying suppliers, as well as for pursuing mergers and acquisitions (M&A), at around 200 billion won.
"If emergency working capital is secured and operations are maintained stably, we expect it can lead to a sale and rehabilitation, the most desirable outcome for creditors, partners, tenants and employees," a Homeplus official said.
