The domestic second-largest hypermarket Homeplus has filed for corporate rehabilitation procedures, raising concerns about the accountability of its largest shareholder, MBK Partners (hereinafter MBK). Even though MBK raised more than 4 trillion won by selling buildings, land, and other assets after acquiring Homeplus, it failed to improve profitability.
According to the Financial Supervisory Service on the 5th, Homeplus secured a total of 4.113 trillion won by disposing of tangible assets, assets for sale, and investment properties from 2016 (based on fiscal year) to 2023, after MBK's acquisition.
In terms of disposal amounts, the largest portion came from selling tangible assets. Homeplus secured a total of 3.4035 trillion won by selling stores, land, and operational equipment within stores. Considering the 708.1 billion won invested during the same period, over 2 trillion won in cash flowed in solely from tangible asset transactions.
Homeplus's performance did not grow. Homeplus's revenue was 6.6067 trillion won in 2016, but only 6.9314 trillion won in 2023, marking a mere 5% increase over eight years. In the recent three fiscal years, it recorded operating losses and net losses. Due to substantial financial expenses, the debt ratio rose from 663.9% to 3211.7% during this period.
After acquiring Homeplus in 2015, MBK invested 3.2 trillion won from its third fund and utilized 2.7 trillion won from borrowing funds. At that time, the earnings before interest, taxes, depreciation, and amortization (EBITDA), which could gauge Homeplus's profitability and cash-generating ability, was around 800 billion won annually. MBK judged that it could adequately cover interest expenses based on this.
After MBK acquired Homeplus and sold off assets worth over 4 trillion won, there is increasing interest in the potential impact on the management rights dispute at Korea Zinc. MBK has publicly stated it would manage the company through a professional manager if it were to acquire the management rights of Korea Zinc. In response, Korea Zinc claimed that the smelting industry is not an area easily accessible to non-experts. Concerns are growing in the market about whether MBK can effectively manage Korea Zinc following its filing for Homeplus's corporate rehabilitation.
MBK has stated it will not sell its equity in Korea Zinc in the short term, but concerns may resurface that Korea Zinc's assets could be sold piecemeal due to the highlighted asset sales of Homeplus. Korea Zinc has argued that if MBK acquires it, the assets could be sold off individually.