홈플러스 will file an immediate appeal against the Seoul Bankruptcy Court's decision to terminate its rehabilitation process. The company, which faced bankruptcy, is attempting to revive its operations with a 200 billion won emergency funding (DIP). While a last-minute agreement was reached among major shareholders, creditors, and the labor union to secure the DIP, significant challenges remain, including court evaluations and restoring supply chains for normal operations.
According to the retail industry on July 19, Homeplus plans to submit its appeal to the Seoul Bankruptcy Court on July 20, just 17 days after the court's decision to terminate the rehabilitation process on July 3. On July 16, MBK Partners, the largest shareholder, and Meritz Financial Group, the main creditor, along with the labor union, reached a dramatic agreement just before the appeal deadline. MBK Chairman Kim Byung-joo provided a personal guarantee for the full amount of the DIP loan, and Meritz's three subsidiaries (Securities, Fire & Marine, and Capital) approved the 200 billion won loan at a board meeting. The union also agreed to minimize the financial burden on the company during the closure of 37 stores.
However, filing the appeal does not guarantee an immediate resumption of the rehabilitation process. The court must reassess the funding plan and the company's future viability before reversing its decision. Additionally, the procedures necessary for executing the DIP loan and obtaining approval from major creditors for the rehabilitation plan must be completed. There are concerns that 200 billion won may not be sufficient to normalize operations across all stores. As of late May, Homeplus's public claims amounted to 1.099 trillion won, more than triple the 332.8 billion won reported when the rehabilitation process began in March of the previous year. Public claims are prioritized for repayment over general rehabilitation claims and include payments to suppliers, wages, and taxes.
As of late April, Homeplus owed approximately 410 billion won to suppliers. The company temporarily closed 67 stores nationwide starting July 13 due to a depletion of operating funds. To reopen, it must persuade suppliers who have not received payments and rehire departing vendors and staff. The stores need to be restocked, and refrigeration and freezing equipment must be serviced. A survey by the Korea Federation of Small and Medium Enterprises found that the average unpaid amount owed to small suppliers by Homeplus is 77.4 million won per company. Given these factors, industry experts believe that reopening operations may not be feasible until at least August.
Political pressure is also mounting. The Democratic Party initially planned to hold a hearing on July 27 through the National Assembly's Political Affairs Committee but canceled it following the funding agreement, opting instead for a question-and-answer session on July 21. Democratic Party representatives stated, "This funding is merely a temporary measure, akin to giving artificial respiration," and called on MBK to implement fundamental measures for job security and to minimize harm to suppliers.
If the court finds the appeal valid, it could reverse the decision to terminate the rehabilitation process, extending the deadline to September 4. A Homeplus representative stated, "We plan to finalize our restructuring efforts and pursue the sale of remaining business units, including headquarters, hypermarkets, and online operations," adding that if the court decides to extend the rehabilitation process, they will coordinate with suppliers to establish a timeline for resuming operations.
According to the retail industry on July 19, Homeplus plans to submit its appeal to the Seoul Bankruptcy Court on July 20, just 17 days after the court's decision to terminate the rehabilitation process on July 3. On July 16, MBK Partners, the largest shareholder, and Meritz Financial Group, the main creditor, along with the labor union, reached a dramatic agreement just before the appeal deadline. MBK Chairman Kim Byung-joo provided a personal guarantee for the full amount of the DIP loan, and Meritz's three subsidiaries (Securities, Fire & Marine, and Capital) approved the 200 billion won loan at a board meeting. The union also agreed to minimize the financial burden on the company during the closure of 37 stores.
However, filing the appeal does not guarantee an immediate resumption of the rehabilitation process. The court must reassess the funding plan and the company's future viability before reversing its decision. Additionally, the procedures necessary for executing the DIP loan and obtaining approval from major creditors for the rehabilitation plan must be completed. There are concerns that 200 billion won may not be sufficient to normalize operations across all stores. As of late May, Homeplus's public claims amounted to 1.099 trillion won, more than triple the 332.8 billion won reported when the rehabilitation process began in March of the previous year. Public claims are prioritized for repayment over general rehabilitation claims and include payments to suppliers, wages, and taxes.
As of late April, Homeplus owed approximately 410 billion won to suppliers. The company temporarily closed 67 stores nationwide starting July 13 due to a depletion of operating funds. To reopen, it must persuade suppliers who have not received payments and rehire departing vendors and staff. The stores need to be restocked, and refrigeration and freezing equipment must be serviced. A survey by the Korea Federation of Small and Medium Enterprises found that the average unpaid amount owed to small suppliers by Homeplus is 77.4 million won per company. Given these factors, industry experts believe that reopening operations may not be feasible until at least August.
Political pressure is also mounting. The Democratic Party initially planned to hold a hearing on July 27 through the National Assembly's Political Affairs Committee but canceled it following the funding agreement, opting instead for a question-and-answer session on July 21. Democratic Party representatives stated, "This funding is merely a temporary measure, akin to giving artificial respiration," and called on MBK to implement fundamental measures for job security and to minimize harm to suppliers.
If the court finds the appeal valid, it could reverse the decision to terminate the rehabilitation process, extending the deadline to September 4. A Homeplus representative stated, "We plan to finalize our restructuring efforts and pursue the sale of remaining business units, including headquarters, hypermarkets, and online operations," adding that if the court decides to extend the rehabilitation process, they will coordinate with suppliers to establish a timeline for resuming operations.
* This article has been translated by AI.
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