Chair Kim Byung-ju of MBK Partners is said to be fulfilling repayment obligations for payment guarantees provided and funds directly raised during Homeplus Co.'s corporate rehabilitation process. After recently providing a full joint guarantee for an additional 200 billion won emergency debtor-in-possession (DIP) loan, repayment has begun on existing guaranteed debts and borrowing fund as well, signaling that Kim's personal financial burden related to Homeplus Co. is materializing.
According to the investment banking (IB) industry on the 25th, the guarantors including Kim are proceeding with repayment of principal and interest on a 60 billion won DIP loan that Curious Partners provided to Homeplus Co. The total repayment, including principal and interest, is about 66 billion won. The amount is reportedly required to be fully repaid within a short period.
The funds are DIP financing raised as emergency operating capital right after Homeplus Co. entered rehabilitation. In April last year, Curious Partners lent 60 billion won, and Kim and Vice Chair Kim Kwang-il of MBK Partners, who also serves as Homeplus Co. co-CEO, provided joint guarantees. The loan carried an annual rate of 10% with a three-year maturity at the time.
In particular, Kim's side previously waived the right to seek indemnity from Homeplus Co. after performing on the guaranteed debt. As a result, the amounts Kim's side repays on its behalf will be difficult to claim back from Homeplus Co. later and will ultimately remain a personal burden.
Repayment demands on existing borrowing fund are also continuing. Regarding the 100 billion won fund set up to resolve overdue wages at Homeplus Co. and to secure emergency operating capital, some demands for principal repayment have recently been made, according to reports. At the time, key MBK Partners executives, including Kim, directly raised funds secured by personal asset such as their homes and injected them into Homeplus Co.
Recently, along with partial principal repayment of those funds, there have also been continued demands to provide additional collateral. In effect, the borrowing fund taken out using personal asset as collateral to secure Homeplus Co.'s operating funds is leading to actual principal repayment and the provision of additional collateral.
Kim recently took on an additional joint guarantee to normalize Homeplus Co. Last month, Kim and MBK Partners provided a joint guarantee for the full amount as a condition for Meritz Financial Group to execute a 200 billion won DIP loan to Homeplus Co.
Previously, MBK Partners supported about 400 billion won around Homeplus Co.'s rehabilitation, including 100 billion won in emergency operating funds, Kim's 60 billion won joint guarantee, a 40 billion won personal donation, and a 200 billion won joint guarantee on a securities firm loan raised before the rehabilitation filing. Including the latest additional 200 billion won joint guarantee, the financial support borne by Kim's side in relation to Homeplus Co. is said to total 600 billion won.
An industry official said, "While an additional 200 billion won has been guaranteed for Homeplus Co.'s rehabilitation, principal on existing guaranteed debts and borrowing fund is also being repaid," and added, "It appears that the personal financial burden is becoming a reality."