Major banks to offer financial support to Homeplus suppliers

People enter a Homeplus branch in Seoul, Sunday. Yonhap

Major commercial banks on Wednesday announced financial support measures for local suppliers of troubled discount store chain Homeplus after a court decided to terminate its rehabilitation proceedings.

Shinhan Bank said it will offer low-interest loans of up to 500 million won ($333,000) to suppliers facing liquidity difficulties due to delayed payments from Homeplus, with interest rate discounts of up to 1 percentage point.

The bank also said it will waive overdue interest charges for companies with delinquent loans.

Hana Bank will provide emergency business capital loans of up to 500 million won to partner companies in need of funding, offering interest rate discounts of up to 1.3 percentage points.

Other banks, including Woori Bank and Kookmin Bank, also unveiled similar support measures to help Homeplus suppliers stay afloat.

The retailer, wholly owned by private equity firm MBK Partners, has struggled financially amid a prolonged downturn in the discount store sector and entered court-led rehabilitation proceedings in March last year.

Last week, the Seoul Bankruptcy Court decided to terminate the rehabilitation proceedings, a move that could pave the way for the company's dissolution.

Homeplus operated 67 stores nationwide as of last month.