Seoul Court Approves Corporate Rehabilitation Plan for Homeplus

The Seoul Bankruptcy Court on Wednesday approved a corporate rehabilitation plan for Homeplus Co. allowing the financially troubled discount store chain to avoid bankruptcy and begin reviving its operations. The approval followed a meeting where secured creditors, unsecured creditors, and shareholders voted in favor of the proposal. According to center-right reporting, the plan received 100 percent approval from secured creditors and shareholders, and 75.90 percent from unsecured creditors.

Wholly owned by private equity firm MBK Partners, Homeplus filed for corporate rehabilitation in March of last year after a credit rating decline led to liquidity concerns and a funding crunch. The retailer had temporarily closed its outlets starting July 13 due to a lack of operating capital. However, the company reopened on August 13 and reported 116.4 billion won in sales through Sunday.

MBK Partners Vice Chairman Kim Kwang-il stated that the plan focuses on securing profitability by scaling down the business to focus on profitable stores. A key component of the strategy involves selling assets to repay debts. Homeplus aims to sell 19 stores by February 2028 to repay a portion of debts totaling 1.3 trillion won. The court intends to terminate the rehabilitation proceedings once the company begins making repayments. If the company fails to adhere to the plan, the court maintains the authority to revoke authorization and declare bankruptcy.