Homeplus Faces Uncertainty Despite Sale of Express Division

NS Shopping, a subsidiary of Harim Group, has received approval from the Fair Trade Commission to acquire Homeplus Express for 120.6 billion won. This development is expected to accelerate the sale of Homeplus's remaining divisions. However, with less than three weeks until the deadline for the rehabilitation plan, uncertainty about the company's recovery remains due to ongoing issues with securing emergency operating funds.

On June 14, industry sources reported that the Fair Trade Commission completed its review of NS Shopping's acquisition of Homeplus Express within a month of receiving the application, considering Homeplus's ongoing rehabilitation process.

With this approval, NS Shopping has quickly established a nationwide offline distribution network. Homeplus also aims to simplify its structure through the sale of Express, focusing on its hypermarket, online, and headquarters operations.

Homeplus believes this sale will lower the burden on future buyers. The company has reduced its workforce from over 18,000 to about 9,000, enhancing its attractiveness to potential acquirers. Homeplus is now committed to selling its remaining divisions to establish a foundation for implementing its rehabilitation plan.

However, the sale of Express alone does not resolve the uncertainty surrounding the company's recovery. The proceeds from the sale may be limited in their availability for operational use if they are allocated to debt repayment.

Additionally, the company has yet to secure the emergency operating funds necessary for normal operations. Homeplus has stated that it requires 200 billion won in debtor-in-possession (DIP) financing for its recovery efforts. This amount is deemed essential for store efficiency, normalizing product supply, and restoring trust with suppliers.

On the other hand, Meritz Financial Group, the largest creditor, is reportedly considering a loan support of 100 billion won. However, this support is contingent upon guarantees from MBK Partners, Homeplus's major shareholder, and Chairman Kim Byung-joo, leaving the actual funding uncertain. Even if the 100 billion won is secured, it falls short of the 200 billion won Homeplus requires.

The timeline for recovery is tight. Homeplus must finalize its rehabilitation plan by July 3, which includes securing DIP financing, selecting potential buyers, submitting a revised rehabilitation plan, and obtaining creditor approval. If an agreement is not reached by the deadline, the possibility of liquidation cannot be ruled out.

Homeplus has reiterated its commitment to recovery. A company representative stated, "We are making every effort for normalization, including the closure of 37 stores, and the union is also accepting wage concessions and restructuring. The deadline for the rehabilitation process is July 3, and even if extended, it must be successfully concluded before September 3, making this a critical situation." The representative urged Meritz Financial Group to decisively support the 200 billion won in emergency operating funds.