Meritz Financial Group will provide 200 billion won ($134 million) in emergency operating funds, known as debtor-in-possession financing, to support the rehabilitation of Homeplus.
The group announced Thursday that it had decided to provide the full 200 billion won in DIP financing "to share in the hardships faced by Homeplus employees and small-business owners, and to fulfill the social responsibility of finance."
The three Meritz affiliates that serve as Homeplus's largest creditors — Meritz Fire & Marine Insurance, Meritz Securities and Meritz Capital — held board meetings Thursday and approved the DIP financing on the condition that MBK Partners and Chairman Kim Byung-ju provide a guarantee.
Kim and MBK Partners are set to provide a joint guarantee covering the full loan amount.
Earlier, the Seoul Bankruptcy Court ruled on July 3 to terminate Homeplus's rehabilitation proceedings, citing the retailer's failure to secure the minimum 200 billion won in operating funds required to continue the process.
With Meritz Financial's commitment, Homeplus can now seek to overturn that ruling through an immediate appeal and other legal procedures. The company plans to file an immediate appeal with the Seoul Bankruptcy Court on Monday.
The Democratic Party of Korea had been pressing MBK Partners, the majority shareholder, and Meritz Financial Group, the largest creditor, to swiftly arrange emergency operating funds in connection with the Homeplus crisis.
Meritz Financial said the decision to provide the additional 100 billion won was "a difficult one reached after much deliberation, given that we are a financial firm that prioritizes enhancing shareholder value," adding that it hoped "this essential funding will prime the pump for Homeplus's recovery."
moon@heraldcorp.com
