Homeplus, Cut Off by 'LG', Resumes Payments to Partners: "Normal Payments"

Major Food Companies Closely Monitoring the Situation Following LG
"Resumption of General Commercial Claims Payments, Full Repayment"
"CP Issuance Was Scheduled, Repayment According to Rehabilitation Plan"

Homeplus has resumed payments on general commercial claims that had been suspended following the initiation of corporate rehabilitation proceedings. On the 4th, the Seoul Bankruptcy Court decided to commence corporate rehabilitation procedures for Homeplus, temporarily halting all payments on claims.

On the 6th, Homeplus stated in an official press release, "As of now, the available cash balance is 309 billion KRW, and the net cash inflow from operating activities over the next three months is expected to be around 300 billion KRW, bringing the total available funds to exceed 600 billion KRW. From today, we have resumed payments on general commercial claims and plan to repay them in full sequentially."

According to the rehabilitation procedures, general commercial debts with partner companies will be fully repaid, and all commercial transactions occurring after the commencement decision will be paid normally.

Homeplus issued this statement as partner companies, including LG Electronics, began suspending deliveries one after another on the same day. Samsung Electronics is also internally discussing whether to continue supplying home appliances and mobile phones. Major food companies are closely monitoring the situation.

Homeplus also addressed criticism that it caused losses to investors by issuing commercial paper (CP) and electronic short-term bonds just before applying for rehabilitation. Homeplus explained, "CP has been regularly issued, including on the 25th of each month, to secure operating funds. The rehabilitation procedure was urgently filed due to a credit rating downgrade, and the issuance was not made with this in mind."

Additionally, Homeplus clarified that asset-backed commercial paper (ABCP), issued by securities firms based on credit card sales receivables from credit card companies for Homeplus’s card purchase payments, was not directly issued by Homeplus but by the securities firms.

A Homeplus representative said, "CP, electronic short-term bonds, and ABCP issued by securities firms based on Homeplus’s credit card purchase liabilities will all be repaid according to the approved rehabilitation plan under the rehabilitation procedures. We will strive to complete the rehabilitation process as quickly as possible."