MBK Expresses Regret Over "Distorted Reports" on Homeplus and Korea Zinc, Considers Strong Response

MBK Partners has announced its intention to take strong action, including legal measures, in response to certain reports claiming that it financed the acquisition of Homeplus entirely with 5 trillion won in debt, calling such reports a "clear distortion of the facts."

On August 13, MBK Partners issued a press release stating, "The structure of the Homeplus acquisition consisted of approximately 3.2 trillion won in equity capital and 2.7 trillion won in acquisition financing," adding, "Claims by some media outlets that the acquisition was funded with 5 trillion won in debt are a distortion of the facts."

MBK explained, "Of the approximately 3 trillion won in debt held by Homeplus at the time, 1.3 trillion won was high-interest debt borrowed from Tesco, which was refinanced through domestic financial institutions after the acquisition. The remaining short-term borrowings were secured solely for liquidity purposes as working capital."

MBK further pointed out, "At the time of the acquisition, Homeplus's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was around 800 billion won, which was more than sufficient to cover interest expenses. Claims that the acquisition itself was made through excessive borrowing are nothing more than baseless slander."

Regarding allegations that the acquisition of a stake in Korea Zinc imposed an excessive debt burden on the company, MBK stated, "Of the 1.1775 trillion won in bridge financing arranged at the time of the stake acquisition, a portion has already been repaid, reducing the outstanding debt to 600 billion won as of May this year. This represents only 38.3% of the total investment, as was clearly disclosed in the public filing last May."

MBK also emphasized, "Korea Zinc's dividend policy is strictly determined by resolutions of the board of directors and general shareholders' meetings. The MBK-Young Poong consortium cannot unilaterally decide on dividends or shift the burden of debt repayment. Claims that MBK is passing on debt to Korea Zinc and undermining its financial soundness are a clear distortion of the facts."

An MBK Partners representative stated, "All of our investments have been conducted responsibly, following thorough due diligence and legal and financial structuring processes. We are considering a strong response, including necessary legal action, against reports based on false solicitation materials that are not grounded in fact."