Homeplus Rehabilitation Plan Approved With Unanimous Support From Secured Creditors and Shareholders

Homeplus has secured court approval for a rehabilitation plan that could allow the retailer to exit the process, provided it carries out the promised repayments.

At a meeting held by the Seoul Rehabilitation Court on the second, all secured creditors and shareholders voted in favor. The creditor group holding unsecured rehabilitation claims approved the plan by 75.90 percent. The required thresholds were 75 percent for secured creditors, 66.7 percent for rehabilitation creditors and 50 percent for shareholders.

The court said the approval requirements had been met because more than two-thirds of creditors agreed to the plan. The meeting began at 3 p.m. and concluded the vote and approval process roughly two hours later, despite earlier expectations that disagreement among interested parties could prolong proceedings.

Homeplus will now begin debt repayments and efforts to normalize management under the plan. The court intends to close the rehabilitation proceedings once repayments actually begin. If Homeplus fails to make payments as scheduled, however, the court can cancel the approval after authorization. The company could then face a bankruptcy declaration by the court.

Homeplus applied for corporate rehabilitation on March 4 last year, citing a credit-rating downgrade and short-term funding pressures. The court opened proceedings that day. In July, it initially terminated the case after determining that Homeplus had not secured the minimum 200 billion won in operating funds needed to carry out the plan. Homeplus then obtained 200 billion won in emergency debtor-in-possession financing and appealed, prompting the court later that month to overturn the termination through a reconsideration procedure.

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Considering that more than two-thirds of the creditors agreed, we recognize that the requirements for approving the rehabilitation plan have been met.