Key facts
- A bankruptcy court has extended Homeplus Co.'s rehabilitation proceedings until September 4.
- The extension was granted after Homeplus lodged an appeal against a prior decision to terminate the process.
- The retailer had faced termination of proceedings due to a lack of 200 billion won for restructuring.
- Financing was secured through an agreement with Meritz Financial Group and MBK Partners.
- Homeplus had temporarily closed outlets due to a lack of operating capital.
The Seoul Bankruptcy Court has extended the rehabilitation proceedings for Homeplus Co. until September 4, reversing an earlier decision to terminate the process. The troubled discount chain had appealed the termination, which was initially set for July 3.
The court had planned to end the proceedings because Homeplus failed to secure the required 200 billion won (US$134 million) for its restructuring plan. However, the appeal was accepted after Homeplus' largest creditor, Meritz Financial Group, agreed to provide financing. This financing is contingent on a full payment guarantee from MBK Partners, the sole owner of Homeplus.
The court stated that the original termination decision was based on a perceived lack of feasibility due to funding shortages, but the subsequent securing of operating funds led to the recognition of the appeal. Homeplus had temporarily closed its outlets starting July 13 due to a lack of operating capital and difficulties in maintaining store operations.
MBK Partners acquired a 100 percent stake in Homeplus in 2015 from British retailer Tesco Plc for 7.2 trillion won.