The deadline for approval of the rehabilitation plan for Homeplus Co., which is undergoing corporate rehabilitation proceedings, fell on the 3rd. As Homeplus Co. submitted a revised rehabilitation plan, the process moved to a feasibility review by the court and the investigator, but the issue of raising an additional 200 billion won in funding has not been resolved, leaving whether to extend the deadline as a last-minute sticking point.
The Seoul Bankruptcy Court said on the 30th that the revised rehabilitation plan for Homeplus Co. was submitted at 6:58 p.m. the same day. The court explained that after a review by the bench and the investigator, if the feasibility of the revised plan is recognized, it will be put to a vote at the stakeholders' meeting, and if not recognized, it is expected to decide to exclude the rehabilitation plan and terminate the rehabilitation proceedings.
The current deadline for approval of Homeplus Co.'s rehabilitation plan is through the day, but the statutory deadline is Sept. 4. If the bench determines more time is needed to review the revised plan, it can further extend the approval deadline. The court also noted there is a possibility it will extend the deadline to review the revised plan.
Homeplus Co. is said to have prepared an amendment to the existing revised rehabilitation plan that reflects the business improvement effects from its self-help efforts. The amendment is reported to state that since the start of the rehabilitation proceedings, the number of stores fell from 126 to 67 and the workforce shrank to about half, reducing various expense by 1.2 trillion won compared with just before the filing for rehabilitation. It is also said to include a projection that, if product supply normalizes, operating profit could reach the 80 billion won range and could increase to 150 billion won within three years.
However, the issue of securing additional funding, which the court previously flagged, remains. Regarding the plan in the existing rehabilitation proposal to raise an additional 200 billion won, the court viewed that no realistic plan had been presented and requested opinions on excluding the rehabilitation plan and terminating the rehabilitation proceedings. It is reported that the amendment does not include a plan to secure additional funds.
Employees and the labor union of Homeplus Co. say that if the corporations are liquidated, the livelihoods of about 100,000 people, including partner companies, could be jeopardized, and that an extension of the approval deadline for the rehabilitation plan is necessary. In contrast, Meritz Financial Group is said to have limited its support to 100 billion won and conditioned it on a guarantee by Chairman Kim Byung-ju of MBK. MBK is reported to have said it is difficult to accept this.
The bench and the investigator plan to comprehensively review the feasibility of funding, the effects of expense reductions, and the outlook for normalizing operations to decide whether to put the revised plan to a vote at the stakeholders' meeting. The revised plan submitted ahead of the July 3 approval deadline has become a turning point that will determine whether it provides grounds to extend Homeplus Co.'s rehabilitation proceedings or leads to a decision to terminate them.