MBK Partners blamed for Homeplus crisis A Homeplus employee works at a branch, March 4, 2025. Yonhap SEOUL, March 5 (AJP) - MBK Partners, the private equity firm that acquired Homeplus in 2015 through a leveraged buyout, is facing criticism as the South Korean retail giant filed for court-supervised debt rehabilitation on Tuesday. The move, citing short-term liquidity concerns, has intensified scrutiny over MBK’s management strategy, which left the retailer burdened with heavy debt. Homeplus, which generates annual revenue exceeding 7 trillion won (US$4.8 billion), said it sought bankruptcy protection to “alleviate the burden of immediate debt repayments” after recent credit rating downgrades threatened its ability to meet supplier payments due in May. Industry analysts point to what they call a textbook case of the “winner’s curse,” where MBK’s 7.2 trillion won acquisition was financed with about 5 trillion won in debt, leading to years of financial distress for Homeplus. Since 2021, the retailer has suffered consecutive operating losses — 133.5 billion won in 2021, 260.2 billion won in 2022, and 199.4 billion won in 2023. It reported a net loss of 574.3 billion won last year, marking its third straight year in the red. While traditional retailers have faced increasing competition from e-commerce, critics argue that MBK exacerbated Homeplus’s decline by failing to make necessary investments while prioritizing debt repayments. To service its acquisition debt, MBK sold approximately 20 Homeplus stores and leased them back — a strategy that added to the retailer’s financial burden rather than alleviating it. “The problem is not just market conditions but MBK’s financial engineering,” said a retail industry analyst. “They extracted value without reinvesting in the business.” Labor unions claim that since MBK’s takeover, Homeplus has incurred 3.1 trillion won in interest expenses from 2016 to 2023, a figure that dwarfs the company’s total operating profit of 471.3 billion won over the same period. Job cuts and dwindling investments have also eroded competitiveness, further compounding the retailer’s woes. “If they filed for receivership without defaulting, simply to reduce or restructure their debt, then MBK has a moral problem as the controlling shareholder,” said an industry insider. The filing comes despite Homeplus not yet having defaulted on payments. However, the company has already deferred 350 billion won in supplier payments, offering interest on late settlements. According to Korea Investors Service, Homeplus’ net debt reached 5.31 trillion won as of late November 2024, with a debt-to-equity ratio surging to 1,408.6 percent despite capital increases from land revaluations. The company’s outstanding financial obligations include 1.2 trillion won borrowed from Meritz Financial Group, 110 billion won in bank loans, and 250 billion won in commercial paper, amounting to around 2 trillion won in total liabilities. The broader retail sector has been rattled by Homeplus’s court filing, which comes amid growing financial instability in the industry. In July last year, e-commerce platforms Tmon and WeMakePrice both suffered major settlement defaults, adding to concerns over the financial health of South Korea’s retail sector. Some Homeplus suppliers are now considering debt collection procedures over unpaid invoices. 2025-03-05 14:57:50

Seeking to counter China, US looks to South Korea for naval shipbuilding Guided missile destroyer USS Arleigh Burke (DDG 51)/ Courtesy of the U.S. Navy Editor's Note: This is the first in a series of stories examining how the Trump administration’s economic policies affect South Korea's key industries. From trade restrictions to shifting global supply chains, we explore the challenges businesses faced, how they adapted, and the lasting effects on the country’s economy. SEOUL, March 4 (AJP) - As the Trump administration presses ahead with its "Make America Great Again" agenda, the White House is looking to bolster the United States’ waning maritime supremacy — with an eye on South Korea. The U.S. shipbuilding industry has been in decline for decades, a trend set in motion by the Merchant Marine Act of 1920, known as the Jones Act, which fostered monopolies among domestic shipbuilders and eroded global competitiveness. Further restrictions, including the Byrnes-Tollefson Amendment of the 1960s, mandated that military ships and critical components be constructed domestically, exacerbating the sector’s stagnation. Meanwhile, China has tightened its grip on global shipbuilding, accounting for about 60 percent of worldwide orders in 2023. Analysts say that by the end of last year, China had surpassed the United States in total fleet size, fielding 234 vessels to the U.S. Navy’s 219. With domestic ship production amounting to just 0.4 percent of China’s annual output, Washington is turning to allies with robust shipbuilding capabilities. The administration has also announced plans to levy hefty fees on Chinese vessels entering U.S. ports, citing supply chain risks. A Navy frigate (FFX-I)/ Courtesy of HD Hyundai Heavy Industries South Korea, which led the global shipbuilding market in January 2025 with 62 percent of total compensated gross tons (CGTs) for 13 shipbuilding orders, has emerged as a key partner in the U.S. maritime revival. In a call on Nov. 7, Trump asked President Yoon Suk Yeol to strengthen cooperation not only in ship exports but also in maintenance, repair, and operations. One company at the center of these efforts is Hanwha Ocean, which recently acquired Philadelphia Shipyard through its subsidiary Hanwha Systems. Hanwha has secured two maintenance, repair, and operations (MRO) contracts with the U.S. Navy, including work on the 40,000-ton dry-cargo ship Wally Schirra and the U.S. 7th Fleet’s Yukon — developments that have heightened interest in the firm’s role. HD Hyundai Heavy Industries is also reportedly exploring investment opportunities in the United States. The company, which entered the MRO sector in 2022 through work with the Philippine Navy, is now considering investment in U.S. shipyards to expand its foothold. Both Hanwha and Hyundai secured Master Ship Repair Agreements (MSRAs) with the U.S. Naval Supply Systems Command this year, though these contracts remain limited to MRO. A new bill introduced by Republican senators on Feb. 5 could change that, potentially allowing the Pentagon to contract naval shipbuilding to allies with mutual defense treaties or NATO member states — an opening that could position South Korea as a builder of U.S. military vessels. The U.S. aims to construct 364 new warships by 2054, an effort estimated to cost $1.075 trillion, in a bid to counter China’s growing maritime power. Beyond naval projects, South Korean shipbuilders specializing in liquefied natural gas (LNG) carriers are also anticipating a market boom as the U.S. tightens restrictions on Chinese shipyards. Industry leaders, including HD Korea Shipbuilding & Offshore Engineering, Samsung Heavy Industries, and Hanwha Ocean, posted collective operating profits in 2024. With environmental regulations tightening and tariffs looming over Chinese-made vessels, analysts predict further gains for South Korean firms. Signs of this shift are already evident: German shipping giant Hapag-Lloyd is reportedly in the final stages of a $1.2 billion deal with Hanwha Ocean for six LNG dual-fuel container ships, choosing the South Korean firm over Chinese competitors, according to the shipping trade journal TradeWinds. Diplomatic engagements further underscore the sector’s importance. South Korea’s Minister of Trade, Industry, and Energy, Ahn Duk-geun, recently met with senior Trump administration officials to discuss shipbuilding cooperation, and U.S. Secretary of Defense Pete Hegseth is expected to visit Seoul in late March to advance talks. Even as Trump's 25 percent tariffs on steel and aluminum imports remain in place, South Korea and the United States have agreed to establish a consultative group to explore tariff measures and deepen cooperation in shipbuilding. 2025-03-05 10:37:49

Trump will pursue US dominance in expanding space economy: Korean institute Elon Musk listens to U.S. President Donald Trump in the White House in Washington D.C., Feb. 11, 2025. Reuters-Yonhap SEOUL, March 5 (AJP) - The Trump administration is expected to pursue an aggressive expansion of the United States’ role in the growing space economy, particularly in the Earth-Moon-Mars sphere, according to a report from South Korea’s science and technology policy institute. The Korea Institute of S&T Evaluation and Planning (KISTEP), in a briefing released on Feb. 28, indicated that a renewed Trump presidency would likely reinforce policies emphasizing space commercialization and military capabilities — initiatives that took root during his first term. A focal point of these efforts, the report suggests, will be manned exploration of Mars. “Trump’s second-term space policy is expected to solidify the ‘commercialization of space’ and ‘strengthening of space military power’ policies that began during his first term,” the report states, predicting that the U.S. will seek to “secure overwhelming dominance” in the space economy as Mars exploration gains momentum. The report anticipates a shift in leadership within American space programs, with private enterprises such as Elon Musk’s SpaceX playing an increasingly central role. Federal agencies, including NASA, could see their objectives recalibrated, while government-backed initiatives like the Space Launch System may undergo significant revisions as the private sector’s influence expands. Musk’s potential sway within the Trump administration is highlighted as a key driver of corporate involvement in national space initiatives, potentially reshaping lunar exploration programs that have been a cornerstone of U.S. space ambitions in recent years. For South Korea, the KISTEP report underscores the importance of maintaining strong cooperative ties with Washington while exploring opportunities to participate in emerging initiatives, such as human Mars exploration. Researchers also suggest that Seoul should seek to engage the U.S. in Korean-led space exploration projects, aiming to elevate bilateral cooperation in the face of increasing military and strategic interests in space. South Korea has been a longstanding U.S. ally in space exploration. In October 2024, the country signed a research agreement with NASA, three years after joining the Artemis Accords — non-binding multilateral arrangements spearheaded by the U.S. to foster international collaboration in space activities. 2025-03-05 10:12:20

XXIO, Srixon club importer fined for price-fixing Golf clubs/ Getty Images Bank SEOUL, March 4 (AJP) - South Korea’s antitrust regulator has imposed a fine of 18.6 billion won ($12.8 million) on Dunlop Sports Korea for preventing retailers from offering discounts on its golf clubs. The Fair Trade Commission (FTC) found that Dunlop, which imports and distributes Japanese golf brands including XXIO and Srixon, had enforced minimum selling prices between 2020 and 2023, threatening dealers with supply cuts, financial penalties, and contract terminations if they failed to comply. According to the commission, the company deployed undercover investigators posing as customers to monitor compliance, conducting these covert inspections as many as nine times annually. Dunlop also pressured retailers not to resell products to unauthorized dealers, a practice regulators deemed an illegal restriction on price competition. Retailers caught violating the pricing policy faced immediate consequences, including disruptions in the supply of popular models and reductions in financial support, the FTC said. “This action will promote free price competition among golf retailers,” an FTC official said. “We expect consumers will now be able to purchase golf clubs at more affordable prices.” The penalty underscores the regulator’s stricter approach following a 2009 case involving six golf equipment sellers engaged in similar price-fixing practices. At the time, Dunlop avoided detection. 2025-03-04 13:17:04

Korea launches alternative stock trading system, extends trading hours to 12 Nextrade office in Yeouido, Seoul/ Yonhap SEOUL, March 4 (AJP) - South Korea’s first alternative stock trading system, Nextrade (NXT), made its debut on Tuesday, extending stock trading hours to 12 hours daily and offering investors the flexibility to trade during commuting hours. Founded by the Korea Financial Investment Association in collaboration with major securities firms, NXT will initially facilitate trading for 10 stocks, with plans to expand to 800 within a month. The platform operates from 8 a.m. to 8 p.m., significantly widening the window for investors compared to the Korea Exchange’s traditional schedule of 9 a.m. to 3:30 p.m. Nextrade’s extended hours feature a pre-market session from 8 a.m. to 8:50 a.m. and an after-market session from 3:30 p.m. to 8 p.m. This structure allows traders to react more swiftly to global financial developments occurring outside regular market hours. In a bid to attract investors, Nextrade offers transaction fees that are 20 to 40 percent lower than those of the Korea Exchange. Maker orders are subject to a fee of 0.0013 percent of transaction value, while taker orders are charged 0.0018 percent — both undercutting the Korea Exchange’s flat fee of 0.0023 percent. Of the 32 securities firms planning to join Nextrade, 28 have committed to participating from the first day, collectively accounting for 87.4 percent of last year’s brokerage market share by transaction value. The initial lineup of tradable stocks includes five from the benchmark KOSPI index — Lotte Shopping, Cheil Worldwide, Kolon Industries, LG Uplus, and S-Oil — as well as five from the KOSDAQ market — Golfzon, Dongkook Pharmaceutical, SFA Engineering, YG Entertainment, and Com2uS. 2025-03-04 13:12:15

South Korea tax revenue growth slows in January Cars await shipment/ Courtesy of Hyundai Motor Group SEOUL, March 1 (AJP) - South Korea's tax revenue rose at a significantly slower pace in January compared to a year earlier, sparking concerns about potential fiscal shortfalls as the economy shows signs of cooling. January tax collections increased by 1.5 percent year-on-year to 46.6 trillion won (US$31.8 billion), a sharp deceleration from the 7.1 percent growth recorded in the same month last year, according to data released by Statistics Korea on Friday. The revenue progress rate reached only 12.2 percent of the annual target, falling below both last year's January rate of 13.6 percent and the five-year average of 12.6 percent. While the growth showed signs of cooling down, a Ministry of Finance official said, "It's premature to make definitive judgments about this year's tax situation based solely on January's performance." Value-added tax, one of the three major tax categories, declined by 8 trillion won from the previous year due to increased tax refunds and reduced imports. The securities transaction tax also fell by about 200 billion won compared to January 2024. The lackluster revenue performance comes despite partial restoration of the flexible fuel tax rate and expanded performance-based salary payments, which marginally boosted transportation, energy, environmental, and income tax revenues. 2025-03-01 13:14:54

North Jeolla province edges out Seoul in bid to host 2036 Summer Olympics North Jeolla province officials cheer as the province secured the right to represent South Korea in the bid for the 2036 Summer Olympics, Feb. 28, 2025. Yonhap SEOUL, March 1 (AJP) - North Jeolla province secured the right to represent South Korea in the bid for the 2036 Summer Olympics, delivering a stunning upset over the capital Seoul in a national vote that showcased growing support for regional development. The southwestern province garnered 49 votes to Seoul's 11 in Friday's secret ballot held by the Korean Sport & Olympic Committee (KSOC), shattering expectations and positioning a regional contender to potentially host South Korea's first Summer Games since Seoul in 1988. North Jeolla's victory hinged on its proposal for a multi-city approach, promising to distribute Olympic events across several provincial regions including Daegu city, South Jeolla province, North and South Chungcheong provinces, addressing the International Olympic Committee's emphasis on cost efficiency. "The reality is that 88.5 percent of national sporting events in Korea are held outside the capital region," North Jeolla Governor Kim Kwan-young said during his presentation, drawing parallels to Australia's approach of rotating Olympic hosting duties among Melbourne, Sydney and Brisbane to promote balanced national development. The province plans to allocate athletics competitions to Daegu city, archery and swimming to Gwangju city, gymnastics to Cheongju city, tennis to Hongseong county, and surfing events to Goheung county, creating what it describes as a coalition of regional cities. Seoul, which successfully hosted the 1988 Summer Olympics, emphasized its established infrastructure and accommodation capacity but failed to convince voters despite these advantages, marking its second consecutive Olympic bid defeat after losing the 2032 Games to Brisbane, Australia. Sports officials attributed North Jeolla's unexpected triumph to the province's passionate campaign and Seoul's overconfidence. Provincial representatives reportedly worked tirelessly, meeting individually with voting delegates nationwide to convey their vision, while Seoul delegated much of its presentation to staff members. The financial feasibility of North Jeolla's Olympic ambitions remains questionable, with the province estimating costs at about 9.18 trillion won (US$6.27 billion), though actual expenses could escalate significantly as new venues and athlete villages are constructed. International competition presents another formidable challenge, with India, Qatar, Indonesia, Turkey, Chile, and Hungary among about 10 nations already vying for the 2036 Games. Asian contenders including India and Indonesia are currently considered frontrunners by international sports analysts. The International Olympic Committee is expected to begin formally evaluating bids after selecting a new president in March, with the selection process accelerating under new leadership beginning in June. KSOC President Ryu Seung-min acknowledged the challenges ahead, saying that with North Jeolla's relatively low international profile, "the committee must move even more swiftly" to support the province's Olympic aspirations. 2025-03-01 11:00:04

Korean industry minister forges ties with Trump administration officials SEOUL, March 1 (AJP) - South Korea's Minister of Trade, Industry and Energy, Ahn Duk-geun, has conducted a series of high-level meetings with senior Trump administration officials in Washington D.C., marking the first major trade discussions between the two nations since President Trump's second inauguration. The meetings, which took place from Feb. 26 to 28, included talks with Secretary of Commerce Howard Lutnick, Secretary of the Interior Doug Burgum, and U.S. Trade Representative Jamieson Greer, according to a ministry statement released on Saturday. During the discussions, Minister Ahn conveyed South Korea's position regarding U.S. tariff plans and explored avenues to strengthen bilateral cooperation amid leadership vacuum following the martial law crisis. The two countries agreed to establish working-level consultative bodies focused on tariff measures and shipbuilding cooperation, with South Korea aiming to ensure maximum consideration for its business interests in future negotiations. Minister Ahn emphasized South Korea's commitment to addressing American trade deficit concerns by increasing imports of U.S. gas and crude oil, while also highlighting potential future investments by Korean companies in the American market. Particularly noteworthy was the progress made on shipbuilding cooperation, an area of personal interest to President Trump, with Minister Ahn announcing South Korea's readiness to form a government-wide task force to systematically prepare for public-private collaboration. The South Korean delegation also met with Senator Mark Kelly of Arizona, who introduced the "Ships for America Act" aimed at strengthening the U.S. shipbuilding industry, as well as leaders from influential think tanks. The Trump administration is currently conducting a comprehensive review of U.S. trade policies, due to be completed by Apr. 1, leaving out specific details about potential tariffs on South Korean goods unspecified during the talks. "With this visit to the United States, I believe we have laid the cornerstone for strengthened cooperation with the new cabinet of the U.S. government," said Minister Ahn, adding that South Korea would respond systematically to forthcoming U.S. industrial, trade and energy policies. 2025-03-01 09:49:12

Video streaming firm Wavve faces damage suit for copyright infringement The head office of the Korea Music Copyright Association/ Courtesy of KOMCA SEOUL, February 27 (AJP) - The Korea Music Copyright Association (KOMCA) has filed a lawsuit against the online video streaming service Wavve, seeking approximately 40 billion won ($27.7 million) in damages for alleged copyright infringement, the association said on Thursday. The lawsuit, submitted to the Seoul Central District Court on Feb. 11, follows years of what KOMCA describes as Wavve’s refusal to pay legally required royalties for the use of copyrighted music in its streaming content. According to KOMCA, the unpaid fees were calculated based on Wavve’s reported revenue and subscriber data spanning from 2011 to 2022. The association is also demanding an additional 15 percent penalty for infringement. “In a situation where there was no other way to remedy the creators’ damages, we had no choice but to resort to legal action,” KOMCA said in a statement. The association further criticized major domestic over-the-top (OTT) operators for collectively amassing more than 100 billion won in unpaid royalties. Despite losing an administrative lawsuit against the Ministry of Culture, Sports and Tourism in 2022, KOMCA said, these companies have continued to resist payment obligations. Wavve, however, countered that KOMCA’s claims were based on “unilateral and arbitrary” collection standards that do not reflect market realities. The streaming platform urged the association to return to negotiations. The company argued that KOMCA has imposed disproportionately high music royalty demands on OTT services, forcing them to shoulder more than double the reasonable costs after lobbying for regulatory changes through the ministry. 2025-02-27 16:35:36

Lotte Construction may sell headquarters building in Seoul to address liquidity problem Lotte Construction's headquarters in Seocho-gu, Seoul/ Yonhap SEOUL, February 27 (AJP) - Lotte Construction, a subsidiary of Lotte Group, is taking steps to liquidate assets worth approximately 1 trillion won (US$696 million), including the sale of its building in Seoul’s Seocho-gu, amid ongoing concerns about a liquidity crisis at the group. The construction firm said Thursday that it has commissioned property consulting firms to analyze the profitability of various options for its building, including an outright sale, self-development, and sale-and-leaseback arrangements. Lotte Construction has its head office in the building since 1980. Valued at approximately 500 billion won, the property is considered attractive to developers and asset management firms due to its potential for residential development. The company is also reviewing the sale of warehouse assets in the Seoul metropolitan area and its stake in a rental housing REIT. If all assets are divested, the total liquidity generated could reach 1 trillion won. The move aligns with Lotte Group’s broader strategy to streamline operations by divesting non-core businesses and assets following liquidity challenges that emerged late last year. “We are considering the sale of our headquarters building and have nearly finalized decisions on selling our other assets,” a Lotte Construction official said. “This assessment is not driven by an urgent need for liquidity, but rather by our belief that it is prudent to consider asset sales while the company remains in a stable position.” 2025-02-27 14:10:06