The restructuring process for Homeplus is increasingly burdened by losses from policy financing. As the deadline for the approval of the restructuring plan approaches on July 3, the Credit Guarantee Fund has confirmed that it has guaranteed a total of 883 billion won for two special purpose companies (SPCs) that included Homeplus's private bonds. This follows the realization of losses from funds raised through past policy guarantees, while securing new operating funds to complete the restructuring process remains challenging.
According to financial sources on June 16, Homeplus issued a total of 860 billion won in private bonds through the Credit Guarantee Fund's Primary Collateralized Bond Obligation (P-CBO) program in October 2023 and April 2024, with amounts of 560 billion won and 300 billion won, respectively. P-CBO is a policy financing product that pools bonds from companies unable to issue corporate bonds on their own credit and guarantees repayment through the Credit Guarantee Fund.
On May 8, the Credit Guarantee Fund guaranteed 261 billion won for the SPC 'Shinbo 2024 8th Special Purpose Company,' which included 300 billion won in Homeplus private bonds. Since no other corporate defaults occurred in that SPC, the entire 261 billion won can be attributed to Homeplus's unpaid bonds. On November 5 of last year, the fund also guaranteed 622 billion won for the SPC 'Shinbo 2023 20th Special Purpose Company,' which included 560 billion won in Homeplus private bonds. However, the Credit Guarantee Fund noted that it is difficult to isolate Homeplus's share due to defaults from other companies in that SPC.
The key issue now is the recovery rate. The 883 billion won is the amount the Credit Guarantee Fund has actually paid, not the final loss amount. The specifics of the recovery will become clearer once the conditions and ratios for repaying the private bonds are established in the restructuring plan. A Credit Guarantee Fund official stated, “We have completed the guarantee payment and will respond according to the progress of Homeplus's restructuring process.”
As the burden of past financing losses shifts to policy financing institutions, securing emergency operating funds (DIP financing) to complete the restructuring process is also hindered by issues of major shareholder responsibility. Meritz Financial is considering a 100 billion won support package based on a joint guarantee from MBK Partners and Chairman Kim Byung-joo, but MBK has yet to provide any official documents or detailed plans to Meritz.
Meritz has stated that it is difficult to decide on loan execution without confirming the scope and legal effect of the guarantee. Meanwhile, MBK and Homeplus believe that an additional 200 billion won is necessary for the stable completion of the restructuring process and normalization of operations.
Progress has been made in the asset sale process to secure funds for the restructuring. The Fair Trade Commission recently approved the acquisition of Homeplus Express by NS Shopping, a subsidiary of Harim Group, with a sale price of 1.206 trillion won. However, the use of the sale proceeds and the repayment rates for creditors are expected to be finalized in the restructuring plan.
There are calls within the financial sector for MBK, the largest shareholder, to present a more concrete funding plan. A corporate restructuring attorney noted, “To gain approval for the restructuring plan, both the possibility of securing new funds and a plan for shareholder responsibility must be presented to persuade creditors.”
* This article has been translated by AI.
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