MBK Partners Leader Commits Personal Assets to Aid Homeplus Suppliers
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Synopsis
MBK Partners Ltd. pledges to use personal assets to support Homeplus suppliers affected by the rehabilitation process. Chairman Kim Byung-ju aims to ensure timely payments to small businesses. Homeplus seeks to address financial stability and plans to submit self-rescue strategies by June 3.
Key Takeaways
- MBK Partners commits personal funds for supplier support.
- Homeplus filed for rehabilitation due to financial issues.
- Chairman Kim Byung-ju pledges financial aid for small businesses.
- Homeplus plans to submit recovery proposals by June 3.
- Financial Supervisory Service to review asset sale processes.
Seoul, March 16 (NationPress) The private equity firm MBK Partners Ltd., which holds ownership of Homeplus, announced on Sunday that its leader will utilize his personal assets to assist suppliers of the prominent discount store chain impacted by the court-supervised rehabilitation process.
Earlier this month, Homeplus initiated corporate rehabilitation proceedings with the Seoul Bankruptcy Court after two local credit rating agencies downgraded its corporate bonds from A3 to A3-, citing the retailer's insufficient efforts to enhance its financial situation, according to reports from Yonhap news agency.
"We will honor our social responsibility in relation to Homeplus' rehabilitation efforts," stated MBK Partners in a press release. "As part of these initiatives, Chairman Kim Byung-ju will extend financial assistance to ensure timely payments for transactions with small businesses expected to encounter challenges." MBK Partners did not elaborate on the specifics of Kim's financial support.
Despite the ongoing criticism directed at MBK for placing Homeplus into rehabilitation without pursuing self-recovery, it is acknowledged that substantial acquisition debt has contributed to the retailer's financial struggles.
On Friday, Homeplus President Joh Joo-yun expressed regret to its partners and investors, vowing to expedite the normalization of the company.
Joh emphasized that Homeplus remains in a financially stable position, having paid 340 billion won (approximately US$234 million) in commercial receivables as of Thursday and retaining 160 billion won in cash. She pledged to fully repay the outstanding debt to mitigate any adverse impacts during the rehabilitation period.
Homeplus plans to present its self-rescue strategies to the court by June 3.
The Financial Supervisory Service (FSS) has promised to investigate whether any deficiencies occurred in the process of Homeplus selling its asset-backed short-term debts (ABSTBs).
Recently, Homeplus issued ABSTBs totaling 82 billion won through Shinyoung Securities Co.. This has sparked controversy regarding whether the company sold these debts while being aware of potential credit rating downgrades.
In 2015, MBK Partners acquired a complete stake in Homeplus for 7.2 trillion won, which included 4.3 trillion won in loans from British retailer Tesco Plc.
