Synopsis
On March 8, South Korea's state pension fund announced it had recovered half of its 612.1 billion won investment in Homeplus Co., which is undergoing a court-led rehabilitation due to liquidity issues. The National Pension Service aims to recover the rest while some suppliers take a cautious approach amid financial uncertainties.Key Takeaways
- South Korea's state pension fund recovers $211.75 million from Homeplus.
- Homeplus is undergoing court-led rehabilitation.
- The National Pension Service invested in Homeplus in 2015.
- Concerns linger about Homeplus's liquidity.
- Major suppliers are reassessing their relationships with Homeplus.
Seoul, March 8 (NationPress) The state pension fund of South Korea has announced the recovery of approximately half of its investment totaling 612.1 billion won ($423.5 million) in the prominent retailer Homeplus Co., which has recently initiated a court-led rehabilitation due to liquidity concerns.
The National Pension Service (NPS) first invested in Homeplus via a fund, including 582.6 billion won in redeemable convertible preferred stock (RCPS), when private equity firm MBK Partners took over the retail chain in 2015.
RCPS serves as a hybrid financial tool that provides investors with fixed dividends while also allowing them the option to convert their holdings into common shares. Additionally, it grants the issuing firm the authority to redeem the shares at a pre-set price or date, as reported by Yonhap news agency.
The NPS disclosed that it has successfully recovered 313.1 billion won in RCPS through refinancing and dividends.
"The NPS has not consented to any modifications regarding the terms of RCPS issuance, and these terms continue to be consistent with those at the time of the original investment," the NPS stated, pledging to make every effort to recover the remainder of its investment.
Homeplus entered the rehabilitation phase this week after a Seoul court approved the request from MBK Partners, the private equity firm that owns the discount store chain.
This decision followed downgrades from various local credit rating agencies regarding the company's standing.
Some local businesses have halted or are deliberating on halting their supply to the retail behemoth Homeplus, which unexpectedly filed for a court-led rehabilitation amid liquidity apprehensions.
While many suppliers continue to provide goods to the retailer due to the absence of clear indicators of an immediate liquidity crisis, some are adopting a cautious stance over fears that Homeplus may struggle to settle payments for delivered products.
Home appliance titan LG Electronics has halted shipments of its products to Homeplus, citing escalating financial risks. Samsung Electronics is reportedly contemplating ceasing its supply to Homeplus.
