The head office of Home Plus in Seoul. The troubled discount chain has asked for
emergency operating funds from its shareholder and creditor. Photo courtesy of Home Plus
SEOUL, Jan. 26 (UPI) — South Korea’s cash-strapped discount chain Home Plus said Monday that it was waiting for an infusion of $210 million emergency operating funds from its stakeholders and state-run Korea Development Bank.
The retailer requested its shareholder, MBK Partners, creditor Meritz Financial Group, and KDB each to provide $70 million to help the company stay afloat while it searches for a new owner.
MBK Partners has pledged to offer its share of the funding, but Meritz and KDB have yet to disclose their positions, according to Home Plus.
Speaking at a National Assembly meeting last Wednesday, Home Plus CEO Joh Joo-yun said that the company is in a grave situation.
“Deliveries to Home Plus stores have plunged to about half their previous levels,” she said. “If emergency funding is not secured within January, we may be unable to pay employee wages or even settle payments for merchandise.”
Under such circumstances, Joh worried that it might be impossible to achieve a turnaround.
Meanwhile, the Seoul Central District Court earlier this month rejected prosecutors’ requests for arrest warrants for MBK Partners Chairman Michael Byungjoo Kim and other executives from the private equity fund and its portfolio company Home Plus.
Prosecutors sought to detain them in connection with asset-backed bonds issued by Home Plus in February, shortly before the firm filed for court receivership in early March.
They argued that such conduct may have exposed investors to potential losses, constituting fraud and violations of the relevant laws.
However, the court stressed the need to ensure that the suspects have sufficient opportunity to defend themselves without being held in custody.
In 2015, MBK took over Home Plus from Tesco in a deal valued at roughly $5 billion. In recent years, the retailer has faced mounting difficulties due to the fallout from the COVID-19 pandemic and intensifying competition from e-commerce rivals.
Against this backdrop, Home Plus has sought to find a new buyer, but such efforts have so far made little progress.