Homeplus Appeals to Government to Prevent Bankruptcy Amid Financial Crisis

Homeplus and its labor union have urged the government to intervene and prevent the company from going bankrupt.

According to Yonhap News on June 24, Homeplus issued a joint statement with the labor union, stating, "Since entering rehabilitation procedures in March of last year, we have been making efforts to reduce our store footprint and sell our supermarket division, but we are now facing a dire financial crisis due to depleted operating funds."

To avert bankruptcy, they have requested an emergency operating loan of 200 billion won from their largest creditor, Meritz Financial Group, with the majority shareholder, MBK Partners, agreeing to provide a joint guarantee for 100 billion won.

However, they claim that Meritz Financial Group has refused to provide support. Homeplus and the labor union warned, "If funds are not secured by the 30th, it will be difficult to avoid bankruptcy," adding that Meritz, which has secured 64 stores as collateral, would recover over 1.8 trillion won through auctioning off the properties to recoup the loan principal and overdue interest.

They emphasized, "Meritz Financial Group stands to gain more from Homeplus's bankruptcy than its survival, which would cause irreversible damage to employees, suppliers, and general creditors."

The Homeplus labor union also called on the government and the rehabilitation court to fulfill their roles. They stated, "If the state and the rehabilitation court do not do their part, it will only assist speculative capital in profiting at our expense," demanding a response from the Blue House.

In response, Meritz stated that the 100 billion won loan is already available for disbursement and reiterated that guarantees from both MBK and Chairman Kim Byung-joo are necessary. Meritz added in a statement, "We have already deposited 100 billion won into an escrow account to save Homeplus and urge Chairman Kim and MBK to demonstrate their commitment through actual financial contributions."

Meanwhile, the Seoul Rehabilitation Court sent a notice to Homeplus's creditors and labor union the previous day, requesting a funding plan of 200 billion won by the 30th.