Retailer pleads with Meritz to provide 200 billion won loan
Homeplus, whose court rehabilitation proceedings were terminated Friday, issued a statement saying it "sincerely apologizes to customers, employees, tenants, suppliers and all other stakeholders who gave their full support in hopes of a successful rehabilitation."
The retailer said that since the rehabilitation process began, it had taken a series of steps including negotiating rent reductions at its stores, suspending operations at some locations and selling off its Homeplus Express division. "However, disruptions in the supply of merchandise occurred during the rehabilitation process, and this led to a vicious cycle of declining sales," it said.
Homeplus added that "without an injection of operating funds, it became increasingly difficult to dispel doubts about the feasibility of our rehabilitation plan, and ultimately the court declined to extend the deadline for approval of the plan."
Regarding the court's guidance that rehabilitation proceedings could be reinstated if the company files an immediate appeal and secures 200 billion won ($129 million) in operating funds within two weeks, Homeplus directed its frustration at its largest creditor, Meritz Financial Group.
"It is deeply regrettable that Meritz Financial Group has refused to provide funding, saying that the 100 billion won joint guarantee offered by MBK Partners and partner Kim Byung-ju — the management firm representing the major shareholder — is insufficient," the company said. "We earnestly plead with Meritz to extend a 200 billion won operating loan."
Homeplus also said it "will actively cooperate with the legal proceedings ahead while working to minimize losses for creditors, employees and other stakeholders."
Meanwhile, the Seoul Bankruptcy Court ruled Friday to terminate the rehabilitation proceedings, saying Homeplus needed at least 200 billion won in operating funds to carry out its rehabilitation plan but had failed to secure the amount, making execution of the plan no longer viable.
spa@heraldcorp.com
