Homeplus Submits Restructuring Plan Amid Court Pressure

Homeplus, a major South Korean retailer, faces a critical juncture as it navigates potential liquidation or restructuring. The company submitted a revised restructuring plan to the Seoul Rehabilitation Court on May 29th, shifting its focus from securing additional capital to highlighting profitability improvements through structural reforms.

This move comes after the court demanded a concrete plan for further funding by May 30th. Previously, Homeplus had proposed 300 billion won in emergency working capital from its major shareholder MBK Partners, the Korea Development Bank, and Meritz Financial Group. However, only 100 billion won from MBK Partners was actually provided, prompting the court's demand for a more detailed financial strategy ahead of the June 3rd deadline for approving the restructuring plan.

The revised plan details the company's efforts since its rehabilitation filing in March, including a 1.2 trillion won reduction in costs through measures like store and staff cuts, rent reductions, and the separate sale of Homeplus Express. Homeplus argues these reforms will enable an operating profit of 80 billion won, potentially rising to 150 billion won within three years.

Meanwhile, five political parties, including the Democratic Party and the Justice Party, have pledged to jointly address the Homeplus situation. They aim to strengthen parliamentary mediation, extend the restructuring deadline, urge the government to devise countermeasures, and establish a social dialogue body to prevent mass unemployment.