Homeplus faces liquidation if 200 billion won funding fails by July 17

Homeplus is on the brink of dissolution, facing a critical deadline of July 17 to secure 200 billion won in funding. If the company fails to raise the necessary capital, a court decision to terminate its rehabilitation proceedings will become final, likely leading to its liquidation and subsequent sale of assets.

Should Homeplus fail to secure the funds within the next ten days, it will be forced to file for bankruptcy. Following a court declaration of bankruptcy, a liquidation process will commence, involving the appointment of a bankruptcy trustee to dispose of the company's assets and distribute them to creditors. However, the trustee's role may be limited, as 62 of Homeplus's self-owned stores are already pledged as collateral to its largest creditor, Meritz Financial Group.

This collateral arrangement means Meritz can independently dispose of the secured stores without going through the typical auction process for bankruptcy estates. Meritz, which extended a 1.3 trillion won senior loan in 2024 secured by Homeplus's real estate and tangible assets, is expected to prioritize recovering its loan principal and interest by selling these stores.

Even after Meritz disposes of the collateralized stores, many are unlikely to be resold as large supermarkets. Given the overall downturn in the offline large-format retail sector, it is improbable that major competitors like E-mart or Lotte Mart would enter a bidding war for these locations. The potential for repurposing these sites into mixed-use residential and commercial complexes, logistics centers, or offices is considered the most likely scenario, although the current poor real estate market may prolong the liquidation and resale process.

While Homeplus still has the option to secure the 200 billion won before the deadline and file an immediate appeal, a breakthrough appears unlikely. The key stakeholders, MBK Partners (Homeplus's major shareholder) and Meritz, remain at an impasse. MBK insists Meritz should provide financial support, while Meritz argues that MBK must take responsible action for the company's rehabilitation.