The Democratic Party of Korea brought together MBK Partners, the largest shareholder, and Meritz Financial Group, the largest creditor, for a closed-door meeting to draw up a turnaround plan for Homeplus Co., according to confirmations. Industry watchers say it is highly likely the main agenda was emergency working-capital support to ease Homeplus Co.'s liquidity crunch.
On the 9th, according to political and retail industry sources, Min Byung-deok, a member of the National Policy Committee and chairperson of the Democratic Party of Korea's Euljiro Committee, held a closed-door meeting with Vice Chair Kim Kwang-il of MBK Partners, CEO Kim Jong-min of Meritz Securities, and CEO Kim Joong-hyun of Meritz Fire & Marine. Some members of the Homeplus Co. countermeasure task force also attended.
The specific details of the discussions at the meeting were not disclosed. However, industry sources believe that, with Homeplus Co. in court receivership, securing additional working capital was likely a core agenda item.
Homeplus Co. is currently pursuing a merger and acquisition (M&A) before approval of its rehabilitation plan. However, to proceed with the sale while maintaining normal operations, additional liquidity is needed. Industry watchers also warn that if efforts to raise operating funds fail, the rehabilitation process itself could face serious setbacks.
In particular, observers say the reason politicians stepped in to mediate directly stems from concerns about the social expense that could arise if Homeplus Co. goes bankrupt. With a nationwide store network, numerous partner firms, tenant owners, and employees, there have been persistent warnings that a failed rehabilitation would inevitably trigger a large employment shock.
Meritz, however, is said to believe that new funding would effectively add risk on top of existing claims and therefore requires careful review. In particular, it is reportedly demanding a firm performance guarantee from MBK Partners as a precondition for injecting additional funds.
Homeplus Co. also issued a separate statement the same day, again stressing the need for emergency working-capital support. "Since the start of the rehabilitation process, we have pursued aggressive self-help measures, including the sale of the supermarket division, store restructuring, and organizational streamlining," Homeplus Co. said, adding, "To successfully complete the M&A before approval of the rehabilitation plan, we urgently need about 200 billion won in emergency working-capital support."
The company said that if the funds are secured, it can push ahead with the sale while maintaining operational stability, which would both increase the creditors' chances of recovery and minimize damage to partner firms, tenant owners, and employees.