Homeplus, the South Korean retailer undergoing court receivership, has again asked major creditor Meritz Financial Group to commit to a 200 billion won loan in emergency operating funds. The request seeks an additional 100 billion won after Meritz indicated a day earlier it would consider a 100 billion won loan.
In a statement Wednesday, Homeplus said the emergency operating funds needed to complete the receivership process and normalize operations amount to 200 billion won. "We plead with Meritz Financial Group to lend a total of 200 billion won by taking on an additional 100 billion won," the company said.
Homeplus argued that receivership would be difficult if only half, or 100 billion won, were provided. "If only 100 billion won is provided, we cannot complete the ongoing store closure process and resuming product supply would also be difficult," the company said. "As a result, normalizing operations would become impossible, inevitably lowering the chances of a successful turnaround significantly."
Homeplus also emphasized its self-rescue efforts toward recovery. The company explained that it is pursuing normalization by closing 37 stores, while the union is enduring restructuring by forgoing wages. It added that MBK Partners, the major shareholder, has also promised an additional 100 billion won in joint guarantees.
"The remaining task at this point is securing 200 billion won in emergency operating funds that will make survival possible," Homeplus said. "This is a critical, do-or-die situation in which the receivership process must be successfully concluded, and we can no longer afford to drag out time."
Earlier, Meritz Financial Group said in a statement Tuesday that it is reviewing support of 100 billion won in emergency operating funds (DIP financing). However, it attached the condition that guarantees from MBK Partners headquarters and Chairman Michael Byungju Kim are essential prerequisites. It cited legal constraints such as the duty of loyalty to shareholders under the revised Commercial Act.
The deadline for Homeplus's receivership process is July 3. Even if extended, the process must be completed before September 3. Homeplus repeated its request, saying, "We ask Meritz Financial Group to make a decision to provide 200 billion won in emergency operating funds so that we can overcome the final hurdle of recovery."
