Jun Ji-hye, a reporter at the finance desk of The Korea Times, focuses primarily on economic policy and government agencies, mainly covering the Ministry of Finance and Economy, the Ministry of Budget and Planning, the National Tax Service and the Korea Customs Service. She previously covered financial authorities, including the Financial Services Commission and the Financial Supervisory Service, and earlier worked on the political, city and business desks, reporting on a wide range of issues.
Homeplus plans M&A ahead of rehabilitation as liquidation value exceeds going-concern value
Homeplus headquarters in Seoul's Gangseo District, April 28 / Yonhap
By Jun Ji-hye
Homeplus' liquidation value exceeds its going-concern value by over 1.2 trillion won ($883 million), according to a financial investigation released Thursday by the court-appointed accounting firm.
In response, the major supermarket chain decided to pursue mergers and acquisitions (M&A) ahead of approval of its rehabilitation plan.
Homeplus filed for corporate rehabilitation with the Seoul Bankruptcy Court on March 4, citing a credit rating downgrade.
Samil PwC, the country's largest accounting firm and the court-appointed investigation committee, conducted the review.
Earlier in the day, the firm submitted its report to the court and held a briefing for creditors at Homeplus headquarters to present its findings and outline the next steps.
The report cited three main factors leading to Homeplus' rehabilitation filing — rising fixed costs, the impact of the COVID-19 pandemic coupled with a shift to online retail, and liquidity risks stemming from a credit rating downgrade.
Homeplus' assets were reported at 6.8 trillion won, with liabilities totaling 2.9 trillion won, indicating a significant surplus.
The going-concern value was estimated at approximately 2.5 trillion won, while the liquidation value was assessed at around 3.7 trillion won — higher than the going-concern value due to the roughly 4 trillion won gap between assets and liabilities.
Based on the investigation committee's recommendation, Kim Kwang-il, a partner at MBK Partners and co-CEO of Homeplus along with Joh Ju-yeon, plans to request court approval to proceed with M&A transactions prior to the approval of the rehabilitation plan.
MBK Partners is a private equity firm and the largest shareholder of Homeplus.
However, the executives dispute the committee's assessment, asserting that the going-concern value exceeds the liquidation value, and intend to submit an official opinion to the court reflecting their position.