"Payment Settlement Delays" Lead to Consecutive Contract Terminations... Homeplus Crisis Spreads Widely (Comprehensive)

Suspension of Product Supply by Partners in Electronics and Food Sectors
Labor Union Holds Press Conference, Urges MBK to Take Responsibility

Homeplus's sudden filing for corporate rehabilitation due to a liquidity crisis has triggered a fierce backlash. As payment settlements for sales in January and February of this year have not been made, partner companies have consecutively stopped deliveries, and the blocking of affiliated gift certificate usage is signaling difficulties in normal business operations. The distribution industry is predicting a second offline-originated Tmon-Wemakeprice (Timemep) situation, which caused a massive seller exodus.

The Homeplus labor union stated that this crisis arose from the reckless leveraged management by the private equity fund (PEF) owner MBK Partners and urged accountability from major shareholders, including MBK Chairman Kim Byung-joo. They also appealed for political attention to protect workers' wages and employment.

Expansion of Delivery Suspension by Partners in Electronics and Food Sectors

According to industry sources on the 6th, LG Electronics has temporarily suspended shipments of products supplied to Homeplus. An LG Electronics official said, "Shipments were temporarily halted as a risk response measure," adding, "However, we are discussing normalization plans to minimize customer inconvenience." Samsung Electronics, which supplies electronics and mobile phones to Homeplus, is internally reviewing whether to continue supplying products to Homeplus stores following the rehabilitation filing on the 4th. Among Homeplus employees, rumors that Samsung and LG will withdraw products from stores are already being accepted as fact.

The food industry is also halting transactions with Homeplus. Lotte Chilsung Beverage, Lotte Wellfood, Dongseo Food, and Samyang Foods have made such decisions, while CJ CheilJedang, Nongshim, Daesang, and Ottogi have not yet stopped deliveries but are monitoring the situation.

Homeplus stated, "Although the court specified that 'general commercial claims with partner companies will be 100% repaid' upon deciding to commence rehabilitation proceedings, some partner companies appear to have reacted somewhat sensitively due to concerns about the uncertain situation," adding, "We expect to resolve this through sufficient communication with the relevant partners."

Payments for general commercial claims resumed immediately from that day. Previously, the Seoul Bankruptcy Court's decision to commence rehabilitation proceedings for Homeplus had temporarily suspended all payments on claims. Homeplus said, "As of now, the available cash balance is 309 billion KRW, and net cash inflow from March operations is expected to be around 300 billion KRW, so total available funds exceed 600 billion KRW," adding, "Payments for general commercial claims will resume from today and will be fully repaid sequentially."

Regarding criticism that Homeplus caused losses to investors by issuing commercial paper (CP) and electronic short-term bonds just before filing for rehabilitation, Homeplus emphasized, "CPs have been regularly issued, including on the 25th of each month, to secure operating funds," and "The rehabilitation filing was an urgent measure due to a credit rating downgrade and was not planned with this in mind."

Earlier, it was revealed that Homeplus issued 5 billion KRW in CP and 2 billion KRW in electronic short-term bonds on the 21st of last month, sparking criticism. According to the Korea Securities Depository's securities information portal, as of the 4th, Homeplus's outstanding CP and electronic short-term bonds amounted to approximately 188 billion KRW. The previously issued CP and electronic bonds appear to have been sold to retail investors through securities firms. The financial investment industry has raised concerns that investors who purchased these CPs and bonds may incur losses.

Members of the Mart Industry Union of the Korean Confederation of Trade Unions Service Federation and the Homeplus Branch held a press conference on the 6th in front of D Tower in Gwanghwamun, Seoul, where MBK's office is located. Photo by Yonhap News

Labor Union Highlights MBK Responsibility... "Restructuring Anxiety"

Amid escalating on-site confusion, about 20 members of the Korean Confederation of Trade Unions Service Federation Mart Industry Labor Union (Mart Union) and Homeplus branch held a press conference at MBK's office in D Tower, Gwanghwamun, Seoul, holding placards reading "MBK must take responsibility for Homeplus rehabilitation" and "Condemn MBK, the malicious investor who ruined Homeplus," demanding accountability from major shareholders.

Homeplus workers voiced anxiety over restructuring concerns following the commencement of rehabilitation proceedings. With affiliated gift certificate partners having decided to suspend usage, rendering the certificates worthless, and some suppliers such as LG Electronics and food companies halting product supply, along with reports of corporate card usage being blocked, employees have reached a point where they worry not only about their jobs but also their severance pay.

The Mart Union also raised suspicions that MBK Partners, Homeplus's major shareholder, initiated the sudden corporate rehabilitation procedure to increase resale profits. Kang Woo-chul, Mart Union chairman, criticized, "Since acquiring Homeplus, MBK has been obsessed with capital recovery over corporate competitiveness for the past decade," adding, "They have diminished Homeplus's competitiveness by selling off assets for capital recovery and even sold top-ranking stores due to their high real estate value."

He continued, "It is abnormal to file for rehabilitation under the pretext of preemptive measures against potential financial issues," warning, "If they intend to dispose of Homeplus through large-scale restructuring, it will be a tremendous catastrophe." Chairman Kang raised his voice, saying, "Kim Byung-joo, MBK chairman, who is one of Korea's wealthiest with assets worth 14 trillion KRW, should fulfill his responsibility even if it means contributing assets."

Kim Kwang-chang, Service Federation chairman, also criticized, "We do not trust MBK's claim that this rehabilitation filing was an unavoidable decision to save and stabilize Homeplus," adding, "Typically, owners inject personal funds to revive companies filing for rehabilitation, but MBK has no such intention."

Union members pointed to past cases like Daewoo Shipbuilding & Marine Engineering and Ssangyong Motor, noting that rehabilitation proceedings often accompany severe restructuring under the pretext of reducing fixed costs. There are significant concerns that if store closures, asset sales, and mass layoffs become realities during the rehabilitation process, tens of thousands of workers will lose their jobs.

Chairman Kang noted, "Homeplus alone employs 20,000 people," emphasizing, "The lives of 100,000 workers, including partner companies and tenants, are being shaken to the core." He added, "We expect MBK to wield the knife of large-scale restructuring, which will lead to a tremendous disaster," and warned, "MBK must not attempt any restructuring that kills Homeplus."

After the press conference, they planned to visit MBK to protest and continue their struggle to resolve the situation. They also called for political attention to secure workers' employment stability. Chairman Kim stated, "Politics must intervene to prevent more victims and protect our community's health," insisting, "Wages and employment of workers enduring minimum wage-level pay and extreme labor intensity at the frontlines must be thoroughly protected."

The Homeplus labor union will hold a delegate meeting for representatives from each store on the 18th.