Homeplus Co., which is undergoing corporate rehabilitation proceedings (court receivership), decided to pay this month's employee wages in installments due to worsening finances.
Homeplus Co. management said in a notice titled "A letter to our employees" on Dec. 16, "We have no choice but to proceed with partitioning payment of December wages," adding, "To minimize inconvenience to employees, we will first pay part of the wages on the payday, the 19th, and pay the remainder on the 24th."
Management said, "Even as our finances deteriorated to the point that we could not properly pay various taxes and public charges, we did our utmost to pay wages as normal," but noted, "With no progress in restoring transaction terms and delivery volumes and even the sale delayed, the company's current financial situation has reached its limit."
It continued, "We know well how important wages are to you, and we are extremely sorry that we have no choice but to tell you this," and asked, "For now, please understand that partitioning payment is the only way to prevent a business suspension due to insolvency and to continue rehabilitation."
The cash crunch at Homeplus Co., which has yet to find a suitable buyer, continues to worsen. In addition to payments due to partners and store tenants, about 70 billion won in various taxes, including comprehensive real estate tax and value-added taxes, remains unpaid. Including overdue electricity bills and even National Pension contributions, the arrears swell to the 90 billion won range.