Homeplus Co., which is undergoing corporate rehabilitation, on the 20th unveiled a roadmap for asset sales and financing after court approval of its rehabilitation plan. The idea is to first sell closed stores to release the collateral rights held by its largest creditor, Meritz Financial Group, and then take out two real estate collateral loans using the remaining stores, whose collateral has been lifted, as the underlying asset to repay the remaining claims.
The starting point of the roadmap is that Homeplus Co. currently cannot take out collateralized loans at all. Meritz holds collateral rights over all stores, blocking new borrowing that uses its real estate holdings. A company official said, "Right now Meritz holds collateral rights over all stores, so it is a structure in which we cannot get loans," and added, "If we first sell the closed stores and use that money to repay Meritz's claims, the collateral rights will be lifted, and from then on collateralized loans become possible."
Accordingly, Homeplus Co. will immediately begin selling 19 of the 37 closed stores that it owns once the rehabilitation plan is approved. The target for completion is February 2028. The proceeds will be used first to repay the trust collateral claims held by Meritz. The company expects to repay the full amount with the proceeds from selling the 19 stores alone.
Once the collateral rights are lifted, phase two begins. Homeplus Co. plans to take out two real estate collateral loans in February 2030 and February 2037, using 38 self-owned stores among the 67 stores with normal operations as the underlying asset. The appraised value of the 38 stores is about 2.8 trillion won. In 2030, it plans to take out a loan of about 600 billion won to repay claims, and in 2037 expand the size to the level of a typical real estate collateral loan (900 billion won) to settle in one go the unpaid claims, including the 2030 borrowing.
The premise is normalization of operations. By 2030, when the first loan is taken out, operations at all 67 stores are expected to be normalized, with annual sales of about 4.3 trillion won and operating profit of about 162.8 billion won, according to the company. It estimated operating profit in 2037, the final year, at 218.2 billion won. Homeplus Co. said, "With the ability to generate annual free cash flow of 150 billion to 300 billion won, borrowing 600 billion won in 2030 will not be an operational burden."
Whether the company's roadmap can be put into practice will likely depend on how the court and creditors receive it. Homeplus Co. expects court approval of the rehabilitation plan on the 4th of next month, and believes the general direction will become clear at the creditors' council two days earlier, on the 2nd.
Homeplus Co. resumed operations on the 13th with 200 billion won in emergency debtor-in-possession (DIP) financing raised from Meritz Financial Group based on a guarantee from MBK Partners.