Homeplus has completed the sale of its supermarket division, but the fate of its core hypermarket business is growing increasingly uncertain. Progress has stalled on securing additional funding and persuading creditors, the biggest variables at stake.
Homeplus signed the main contract with NS Home Shopping on Sunday to sell its supermarket division, Homeplus Express, the company said Monday. NS Home Shopping had announced the previous day that it had made final payment of the 120.6 billion won acquisition price for the Express business division and completed the business transfer transaction. As a result, the operation of Homeplus Express will be handled by Homeplus Express Co., a newly established legal entity created as a subsidiary by NS Home Shopping.
Homeplus believes that, given the rapid recovery Express showed during the sale process, the entire business could also quickly return to normal operations if funding is secured. In fact, Express resumed normal product supply from early this month through payment guarantees from NS Shopping. According to Homeplus, the business recovered to 50% of its pre-rehabilitation sales within two weeks, showing a rapid recovery trend.
Homeplus said, "The normalization of Express demonstrates that the remaining business division can also see a rapid recovery in customer traffic and sales if a 200 billion won DIP loan is provided and product supply is normalized."
The problem is that operating capital loans for Homeplus still show no signs of progress. MBK Partners, the current major shareholder, is requesting 200 billion won in funding support from Meritz, the largest creditor, arguing that the rehabilitation of Homeplus is the best choice for creditors, partner companies, and employees alike.
Meritz has mentioned the possibility of providing 100 billion won in emergency operating capital (DIP), while also raising issues regarding the rehabilitation filing process and management responsibility, arguing that responsible funding injection by the major shareholder must come first.
In response, MBK Partners has countered that since the start of the rehabilitation process, it has already directly and indirectly provided funds and credit worth hundreds of billions of won through loan guarantees and Chairman Kim's personal donation.
As the two sides remain at an impasse, the deadline for approval of Homeplus's rehabilitation plan, scheduled for July 3, is now 10 days away. The industry views this date as effectively the watershed that will determine whether Homeplus receives a rehabilitation decision or heads toward liquidation. Depending on the court's judgment, there remains a possibility that the deadline could be extended once more to observe the feasibility of the rehabilitation plan a little longer.
If Homeplus goes bankrupt, tens of thousands of people, including employees, partner and supplier companies, and small business tenants, are expected to be affected. In that case, large-scale employment instability and a chain of management difficulties among partner companies are feared as significant fallout. There is also speculation that the matter could emerge as a major political issue.
A Homeplus official said, "If we secure operating capital through a DIP loan, we can complete the ongoing structural innovation, build a stable business foundation, and achieve normalization in a short time," once again urging Meritz Financial Group to provide a 200 billion won DIP loan.
