Seoul: MBK Partners Ltd., the private equity firm that owns Homeplus Co., announced on Sunday that its chief will use his personal assets to aid suppliers of the major discount store chain currently undergoing a court-led rehabilitation process. Earlier in the month, Homeplus sought corporate rehabilitation with the Seoul Bankruptcy Court following downgrades of its corporate bonds by local credit rating agencies, which cited the company's lack of financial improvement efforts.
According to Yonhap News Agency, MBK Partners stated its commitment to fulfilling its social responsibility concerning Homeplus' rehabilitation. As part of this commitment, Chairman Kim Byung-ju will provide financial support to ensure timely payments to small business partners expected to face challenges. However, MBK Partners did not specify the details of Kim's financial support.
MBK has faced criticism for initiating the Homeplus rehabilitation without attempting self-recovery, largely attributed to the retailer's financial struggles due to significant acquisition debt. Homeplus President Joh Joo-yun recently apologized to partners and investors, promising to restore the company's normal operations swiftly. Joh assured that Homeplus remains financially stable, having settled 340 billion won in commercial receivables and holding 160 billion won in cash. She also committed to repaying the remaining debt fully to mitigate any potential adverse effects of the rehabilitation.
Homeplus is set to submit its self-rescue plans to the court by June 3. Meanwhile, the Financial Supervisory Service (FSS) has pledged to investigate potential irregularities in Homeplus' sale of asset-backed short-term debts (ABSTBs). Last month, Homeplus issued ABSTBs worth 82 billion won through Shinyoung Securities Co., sparking controversy over whether the debts were sold despite awareness of a potential credit rating downgrade.
In 2015, MBK Partners acquired Homeplus from British retailer Tesco Plc for 7.2 trillion won, including 4.3 trillion won in loans.