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Kim Byung-ju, Chairman of MBK Partners. (Photo: Yonhap News Agency) |
[Alpha Biz= Kim Jisun] The Seoul Bankruptcy Court has extended Homeplus’ rehabilitation plan approval deadline by two months, from March 4 to May 4, granting the retailer additional time to pursue restructuring efforts.
The court said on March 3 that it approved the extension after considering MBK Partners’ commitment to inject KRW 100 billion in emergency operating funds. Under South Korean law, court approval of a rehabilitation plan must generally be obtained within one year of the commencement of proceedings, though courts may extend the deadline by up to six months if necessary. Homeplus entered court-led rehabilitation on March 4 last year.
The court noted that the pledged funds are expected to address urgent liabilities, including overdue employee wages and payments to suppliers. MBK Partners plans to secure the funding using assets owned by Chairman Kim Byung-ju as collateral, with KRW 50 billion to be injected by March 4 and the remaining KRW 50 billion by March 11.
Homeplus’ previously submitted rehabilitation plan included a proposal for a total of KRW 300 billion in emergency funding, to be shared equally by MBK Partners, the Korea Development Bank, and Meritz Financial Group. However, after policy lenders and creditors expressed reservations, MBK said it would first provide KRW 100 billion independently.
The court also cited MBK’s statement that it would not seek repayment of the KRW 100 billion even if the rehabilitation plan is ultimately rejected, concluding that the extension would not materially disadvantage other stakeholders. The court added that it needs to review progress on the planned sale of Homeplus Express, the company’s supermarket unit.
While the extension offers temporary relief, industry observers caution that the funding injection may serve only as a short-term measure, with broader creditor negotiations remaining critical amid weak market conditions and limited visibility on operational competitiveness.
The court plans to discuss the formation of a management normalization task force this week, involving the debtor, shareholders and the creditors’ committee.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
