Government agencies join Homeplus repayment plan, approval rate rises to 64.4%

Government agencies have joined Homeplus’s process for repaying public-interest claims in installments, helping lift creditor approval to 64.4%, the retailer said. The figure rose 5.4 percentage points in one day, from 59% on August 31.

As of September 1, approval stood at 66.2% for claims involving payments for goods and 88% for employees, Homeplus said. Public-interest claims include wages and severance pay, trade payments incurred after rehabilitation proceedings began, and certain taxes whose payment deadlines had not arrived when the proceedings started.

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As of September 1, the approval rate of public-interest creditors rose to 64.4%, including 66.2% for payments for goods and 88% for employees.

The agencies that agreed to installment payments were not identified. The size of the increase suggested that institutions holding relatively large claims had taken part, the report said. Public-interest claims rank ahead of rehabilitation claims for repayment, although their holders do not have voting rights at the creditors’ meeting.

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We expect the final approval rate to rise further as additional consent is obtained before today’s creditors’ meeting.

Homeplus said additional approvals before the meeting could push the final rate higher. A company official warned that failing to secure enough support for court approval could increase losses for creditors. Stakeholders, including secured creditors, creditors and shareholders, were due to vote on the rehabilitation plan at a meeting scheduled for 3 p.m.

Under South Korea’s Debtor Rehabilitation and Bankruptcy Act, approval requires at least 75% support from rehabilitation secured creditors, 66.7% from rehabilitation creditors and 50% from shareholders. Legal experts cited in the report said court approval would be highly likely if each group met its threshold.

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If we fail to obtain sufficient approval for authorization by today, creditor losses could increase.