A Seoul Bankruptcy Court terminates rehabilitation proceedings for troubled discount retailer Homeplus, a decision that can lead to bankruptcy and possible shutdown if not overturned. The court rejects a revised rehabilitation plan submitted after an earlier initial plan, citing that Homeplus does not secure the funds required to carry out the restructuring. The court says at least 200 billion won (about $130 million) is needed and that this amount has not been obtained, leaving the plan without a feasible path forward.
Homeplus, which is wholly owned by private equity firm MBK Partners, entered court-led rehabilitation in March last year amid financial strain driven by a slump in the discount store industry. The company previously submitted an initial rehabilitation plan in December and later provided a revised plan.
Following the court ruling, South Korea’s Ministry of Economy and Finance holds a meeting to prepare support for Homeplus workers and partner businesses. The government announces measures including compensation for unpaid wages and low-interest loans for employees, as well as liquidity support for smaller merchants and businesses dependent on Homeplus as a key customer.
