Homeplus says it will sell 19 stores, take out mortgage loans to repay creditors

Homeplus said Thursday it plans to sell some of its own-operated stores and take out real estate-backed loans to repay creditors once its rehabilitation plan receives court approval.

In a statement released Thursday, the company said it would immediately begin selling 19 of the 37 stores it owns that are slated for closure, targeting completion of the sales by February 2028. "The proceeds will be used to repay trust-secured bondholders, and we expect the sale of the 19 stores to cover the full amount," the company said.

Sixty-two of Homeplus's own-operated stores are held as trust collateral by Meritz. Trust-secured assets fall outside the standard auction process in bankruptcy proceedings and can be disposed of independently by the secured creditor. Homeplus said that once the trust-secured bonds are fully repaid, the collateral will be released, allowing the stores to be used as security for real estate-backed loans.

The company plans to use 38 of its own-operated stores — appraised at around 2.8 trillion won ($2 billion) — as the underlying assets for real estate-backed loans in February 2030 and February 2037, with the proceeds going toward bond repayment. In 2030, it intends to take out a relatively small loan against its asset base to service debt, then expand borrowing to a standard mortgage level in 2037 to retire all remaining obligations, including the 2030 loan.

Homeplus projected that by 2030, all 67 stores will be operating normally, generating annual sales of 4.3 trillion won and operating profit of 162.8 billion won. By 2037, operating profit is expected to climb to 218.2 billion won. The company added that annual free cash flow of between 150 billion won and 300 billion won would be generated, posing no operational burden.