Homeplus asks public creditors to accept installment repayment ahead of restructuring deadline

Homeplus said Monday it has asked public creditors to consent to installment repayment of their claims, with roughly 10 days remaining before the final deadline in its court receivership proceedings.

The public creditor consent rate is a key indicator in determining whether a restructuring plan will be approved. If the rate is too low, the Seoul Bankruptcy Court may conclude that the plan is not financially viable and decline to approve it — at which point the receivership process would end and bankruptcy proceedings would begin.

Homeplus's public claims — covering unpaid wages, severance pay and outstanding supplier payments — total about 930 billion won ($672 million). The company is also seeking consent from current and former employees on deferred payment of severance and wages. The employee consent rate has already exceeded 75 percent.

Hanmaeum Council, the company's employee representative body, is sending letters to suppliers requesting their consent to installment repayment. The letters state, "We are deeply sorry, but we need suppliers' consent to installment repayment of public claims in order to secure approval of the restructuring plan."

Homeplus is scheduled to have its restructuring plan reviewed by creditors and secured creditors at a stakeholders' meeting on Sept. 2. If those present consolidate opposition at the meeting, the plan will be scrapped. The Seoul Bankruptcy Court's final deadline to approve the restructuring plan is Sept. 4.