Homeplus stores to temporarily close as operating funds dry up, bankruptcy looms

Homeplus has temporarily halted operations at its headquarters and all of its large discount stores starting today, July 13, citing an inability to cover essential operating costs. The retailer announced that a severe depletion of operating funds has made it impossible to pay suppliers or even cover utility expenses required to maintain the stores.

The decision comes after the Seoul Rehabilitation Court ruled on July 3 to terminate Homeplus's rehabilitation proceedings. The court found the company's revised rehabilitation plan to be unfeasible. However, the court offered a potential reprieve, stating it would reconsider extending the proceedings if Homeplus could present a plan to secure 200 billion won in emergency operating funds by July 20.

Homeplus is currently in discussions with its largest creditor, Meritz Financial Group, to secure the necessary funds. However, Meritz has reportedly not agreed to the loan. The Democratic Party's Euljiro Committee also convened a meeting with Homeplus's major shareholder, MBK Partners, and Meritz Financial Group on July 9, urging them to secure emergency funds and a rehabilitation plan, but no concrete funding solution has emerged.

The company stated that it will decide on resuming operations based on developments and the court's final decision by the July 20 deadline. Without the crucial 200 billion won, analysts predict Homeplus is likely to enter bankruptcy proceedings. Operations for the shopping mall sections will continue if individual store owners wish to remain open, with Homeplus assuring that safety measures will be prioritized.

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Operating funds have been completely depleted, making it impossible to pay for merchandise and even cover utility costs to maintain the stores. We can no longer operate the stores normally, so all headquarters and large discount store operations will be temporarily suspended from the 13th until the situation changes, for security and safety purposes.