The purpose of corporate rehabilitation is to keep a business alive. A simple plan to raise funds by selling assets is not enough. To fulfill a promise to repay creditors a certain amount over several years, a roadmap is needed for how the business will continue after restructuring.
Homeplus has been pulling out one sale card after another ahead of the July deadline for submitting its rehabilitation plan. After selling off Homeplus Express, its supermarket division, the company is now considering mergers and acquisitions (M&A) for its remaining business divisions and the possible sale of store assets. But even if the sales are completed, normalization will not follow immediately.
A hypermarket is a business that generates profit only when its store network, logistics infrastructure, online channels, and product procurement networks all operate together. If a potential acquirer were to take over the remaining assets as a whole, normalization could be expected under new ownership. At present, however, the discussion centers on splitting up business divisions and real estate for separate sales. Whether the mart business and the online business are sold together or separately, and whether store real estate is included or excluded, will determine the business structure left at Homeplus.
Closing a deal and saving Homeplus are two different matters. If the businesses and real estate are divided and sold off, the links between logistics, online operations, and the store network will weaken. In the retail industry, once these links are broken, reconnecting them costs far more than the initial investment. Moreover, this is a moment when competitors such as E-Mart and Lotte Mart are aggressively entering the quick-commerce market. With fierce competition in fast delivery based on store networks and logistics, if Homeplus loses its retail infrastructure, the very foothold for re-entering the market after rehabilitation could disappear.
Of course, asset sales and business reorganization are unavoidable to some extent in rehabilitation proceedings. The question is the standard. If the focus is solely on completing sales and even the core business divisions and assets are sold off, normalization of Homeplus will become a distant prospect. A rehabilitation plan should be designed not as a fundraising scheme but around how the business will be sustained.
The rehabilitation plan to be approved by creditors and the court should answer the following: What sustainable business will Homeplus pursue? If the plan contains only a sales schedule and fundraising measures, it is not a rehabilitation plan but merely a liquidation document.
