Homeplus Files for Rehabilitation in Advance
After Observing the Timemep Incident
On the 18th, at the National Assembly's Standing Committee on Economy and Finance plenary meeting regarding urgent issues related to Homeplus, MBK Partners, and Sambu Construction, Kim Kwang-il, Vice Chairman of MBK Partners and Co-CEO of Homeplus, is responding to lawmakers' questions. 2025.3.18 Photo by Kim Hyun-min
Kim Kwang-il, Vice Chairman of MBK Partners, stated on the 18th that Homeplus decided to proactively file for corporate rehabilitation procedures (court receivership) after witnessing last year's large-scale insolvency caused by the 'Timon+Wemakeprice (Timemep)' incident. He added that he believed it would be too late to attempt rehabilitation after bankruptcy. When asked whether he and MBK Partners Chairman Kim Byung-joo were willing to contribute personal funds, he responded, "We will consider it."
On the same day, Vice Chairman Kim appeared as a witness at the National Assembly's Political Affairs Committee hearing regarding Homeplus and Sambutogeon issues, stating, "After seeing last year's Timemep incident, I thought it was too late to rehabilitate after bankruptcy," and "If there is a risk of bankruptcy, countermeasures should be taken quickly."
He revealed that internal preparations for the rehabilitation filing began on February 28.
Vice Chairman Kim said, "We prepared the rehabilitation application during the holiday period between February 28 and midnight of March 4," adding, "The filing was made to resolve short-term liquidity pressures."
February 28 was the day when credit rating agencies officially announced the downgrade of Homeplus's short-term credit rating from A3 to A3-.
He explained, "The board resolution officially deciding on the rehabilitation filing was on March 3," and added, "After the credit rating downgrade was confirmed, we conducted some internal reviews on February 28 and March 1."
He continued, "Before that, there was no prior preparation," and said, "On the afternoon of March 1, our executives concluded there was no other option, so preparations began in earnest from that point."
Vice Chairman Kim emphasized that corporate commercial paper with an 'A3-' rating is rarely issued due to lack of demand, stating, "According to the reference data at the time, the total outstanding balance of 'A3-' rated paper in South Korea was 67.5 billion KRW, but we had around 600 billion KRW."
He added, "There were repayment demands of 600 to 700 billion KRW over three months, and there was no way to prevent bankruptcy within that period. To protect our business partners and employees, we thought it was appropriate to include Homeplus in rehabilitation and negotiate separately with creditors."
During the hearing, numerous questions were raised about whether it was possible to complete the extensive paperwork for the rehabilitation filing within a few days.
Vice Chairman Kim explained, "Our responsible lawyer is a specialist in this area," and "We received sample applications used elsewhere and adapted them for Homeplus, so it took less time than expected. Also, since monthly settlements are done, we had January's data and did not need to recreate accounting documents."
He reiterated the previous explanation that they did not anticipate the credit rating downgrade.
Vice Chairman Kim said, "The debt ratio decreased from 3000% to 1460% compared to last year, and sales increased," adding, "If the supermarket division is sold, several hundred billion KRW in cash will come in." He continued, "We explained all of this accurately to the rating agencies," emphasizing, "From our perspective, the rating was maintained last year, so we did not expect it to drop only this year."
When asked whether they could have recognized the possibility of a downgrade during the exchange of information with the rating agencies, he replied, "We submitted materials to the rating agencies from the beginning, and they did not request any additional documents to maintain the rating," indicating it was difficult to detect.
Regarding whether the 400 billion KRW worth of Homeplus credit card receivables securitized as Asset-Backed Short-Term Bonds (ABSTB) could be reported to the court as trade receivables, he said, "Homeplus's creditors are credit card companies," but added, "We will consult with the court and handle it accordingly."
When asked by Democratic Party lawmaker Kim Hyun-jung whether he and Chairman Kim were willing to contribute personal funds, he responded, "We will consider it."
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