Homeplus Payday 'Imminent'... Anxiety Spreads Despite Kim Byung-joo's Promise of Personal Investment Appearance

Store Operations Normalize, but Employee Anxiety Grows
Major Shareholder MBK: "Chairman Kim to Provide Financial Support"
Support Fund Intended for Small Business Partner Payments
Actual Contribution Expected to Fall Far Short of Repayment Needs

"There are stores where product supply is not smooth."

"There are talks about whether 'salaries will be paid properly.'

On the 15th, a Homeplus store in Seoul was busy with consumers shopping for the weekend and announcements promoting various discount events. Although some food companies had stopped and then resumed deliveries, filling the shelves with snacks, ramen, instant coffee, and convenience foods without empty spaces, store employees could not hide their concerns about the recent situation surrounding the company.

According to the distribution industry on the 17th, Homeplus will face its first payday since the commencement of corporate rehabilitation proceedings on the 21st. There is a restless atmosphere among employees. Choi Cheol-han, Secretary General of the Mart Industry Labor Union Homeplus Branch, explained, "Union members are worried not only about whether their salaries will be paid properly but also, including those scheduled to retire, whether they will be able to receive their retirement reserves if the company’s situation worsens. This is because they do not know exactly how the retirement reserves, which have been divided among various financial institutions, are being managed."

A banner condemning the major shareholder MBK Partners is hung in front of a Homeplus store in Seoul. Photo by Yonhap News

Homeplus estimates that the amount of trade receivables to be settled monthly, including payments to partner companies, payments for tenants (resident businesses), and employee salaries, is around 500 billion KRW. Among these, employee salaries amount to approximately 56 billion KRW. Earlier, on the 14th, Homeplus executives including President Jo Ju-yeon held a press conference stating, "As of the previous day, we have completed repayment of 340 billion KRW of trade receivables, and payments to most small business creditors, excluding large corporations and brand store owners, will soon be completed," promising, "We will repay all debts and ensure that no one suffers damage due to the corporate rehabilitation process."

Byungjoo Kim, Chairman of MBK Partners

Kim Byung-joo, chairman of MBK Partners, the private equity fund (PEF) operator and major shareholder of Homeplus, has also decided to contribute personal funds to normalize the company. In a statement released on the 16th, MBK said, "We will fulfill our social responsibility related to Homeplus’s rehabilitation," adding, "As part of this, Chairman Kim Byung-joo will prepare financial support to promptly pay settlement amounts to small business partners expected to face difficulties." However, the specific amount of personal funds to be contributed was not disclosed.

Industry insiders estimate that Homeplus will need funds ranging from at least 100 billion KRW to over 1 trillion KRW to extinguish urgent debts and continue normal business operations. Currently, there are 345.7 billion KRW in unpaid goods and service payments to partners from December last year through last month. This amount is classified as 'rehabilitation claims' incurred before 20 days prior to the commencement of rehabilitation proceedings on the 12th of last month, and funds are being sequentially disbursed with court approval.

Additionally, including 112.7 billion KRW in settlement payments to tenant store owners from January to February this year, about 460 billion KRW must be repaid. Furthermore, 'public interest claims (after February 12th)' incurred before 20 days prior to the commencement of rehabilitation proceedings and trade receivables incurred after the start of rehabilitation proceedings are also being repaid. Applying the 340 billion KRW that Homeplus stated has been repaid, the amount to be repaid exceeds at least 120 billion KRW.

However, since MBK has limited Chairman Kim’s personal fund contribution to settlement payments for small business partners, there are forecasts that the actual amount provided will not even reach the minimum amount required for repayment.

The Homeplus union held a press conference at the National Assembly communication hall on the same day, stating, "We judge that Chairman Kim Byung-joo reluctantly made a temporary response of personal fund contribution only after the Homeplus crisis worsened, with increasing social pressure such as demands for his appearance before the National Assembly, tax investigations by the National Tax Service, and union opposition," and strongly condemned "his departure abroad as if fleeing without even a sincere apology to the public."

They added, "Chairman Kim Byung-joo must immediately offer a sincere apology and present concrete solutions to the people and workers who have suffered damages."