As Homeplus proceeds with bankruptcy, raising concerns over unpaid wages and a chain of failures among its suppliers, the government has decided to pay affected workers up to 21 million won each in overdue wages on the company's behalf. It will also provide 440 billion won in emergency liquidity to small and medium-sized suppliers that count Homeplus as a major client, while pushing for extensions on bank loan maturities and repayment deferrals to prevent the damage from spreading.
Lee Hyoung-il, First Vice Minister of Economy and Finance, held a meeting of the "Task Force of Related Agencies on Homeplus" on Monday to review the impact of the termination of Homeplus's rehabilitation proceedings and to finalize support measures for workers and suppliers.
The government will first pay affected workers up to 21 million won each in substitute payments for overdue wages. It will also provide living cost loans of up to 10 million won at an annual interest rate of 1.5 percent within the scope of the unpaid amount. Low-income active workers earning 50 percent or less of the median income will be offered livelihood stabilization funds of up to 20 million won at low interest. Workers who lost their jobs due to store closures or unpaid wages can receive unemployment benefits equal to 60 percent of their average wage over the three months before leaving. Reemployment support linked to the National Employment Support Program, vocational training, and job-seeking promotion allowances will also be provided.
Small and medium-sized suppliers that count Homeplus as a major client will also receive support. The government decided to provide a total of 440 billion won in emergency liquidity to small businesses and SMEs affected by the Homeplus situation, including 90 billion won in emergency management stabilization funds and 350 billion won in special guarantees. The support limit for small business owners will be raised to 100 million won from the current 70 million won, and the interest rate will be cut by 0.5 percentage point. For SMEs, the government plans to ease some of the requirements for emergency management stabilization funds to broaden eligibility.
For suppliers that have already received maturity extensions or repayment deferrals from banks, the government will pursue additional extensions and deferrals with the cooperation of banks. Companies wishing to close down will be supported with store demolition costs and legal advice, and their employment and business restart will be assisted with a job transfer incentive allowance of up to 1 million won and a National Employment Linkage allowance of up to 1.2 million won.
Through this support, the government plans to minimize the damage to workers and suppliers from the termination of Homeplus's rehabilitation proceedings and reduce the shock to the regional economy. "We will hold task force meetings every week to review the progress of support and actively seek additional measures if necessary," a government official said. "We also plan to pursue measures to minimize the impact of store closures on local economies and to fundamentally strengthen the competitiveness of the retail industry."
