Homeplus: "At a Crossroads for Survival...Regret Over Arrest Warrants for Management"

Prosecution Requests Arrest Warrants for Kim Byungjoo, Chairman of MBK Partners, and Others
Homeplus Issues Official Statement on January 8

Homeplus, which is currently undergoing corporate rehabilitation proceedings, issued a statement on January 7 expressing "deep concern and regret" regarding the prosecution's request for arrest warrants for Kim Byungjoo, Chairman of MBK Partners, the company's largest shareholder, and Vice Chairman Kim Kwangil, among others.

In a statement released on January 8, Homeplus said, "At this critical and desperate juncture, where the success or failure of our rehabilitation is at stake, the prosecution's request for arrest warrants for the administrator, executives, and key management of the shareholder company-who have overseen the entire rehabilitation process and played a substantive role in normalization-without fully verifying the facts, disregards the painstaking efforts made for rehabilitation thus far." The company further emphasized, "This is a very serious action that jeopardizes the company's last opportunity."

Yonhap News Agency

Homeplus reiterated its previous position that it did not anticipate a credit rating downgrade nor prepare for rehabilitation proceedings in advance. The company stated, "Due to an unexpected credit rating downgrade, it became virtually impossible to secure the working capital we had been operating with in the existing financial market, so we had no choice but to apply for rehabilitation proceedings to avoid default." The company also explained, "Neither Homeplus nor its shareholder MBK Partners foresaw the credit rating downgrade in advance, nor did we prepare for the rehabilitation process beforehand."

Regarding the Asset-Backed Short-Term Bonds (ABSTB) at the center of the prosecution's investigation, the company said, "Shinyoung Securities independently issued and sold this financial product after conducting its own credit evaluation," adding, "Homeplus was not involved in any way in the issuance or resale transactions of the ABSTB, and the shareholder company likewise made no decisions or gave any instructions related to the issuance." The company continued, "We believe these facts will be clearly revealed through future legal proceedings."

The company also stated that its current management situation is critical. "At present, Homeplus is at a literal crossroads of survival, facing such a severe liquidity shortage that it is difficult to pay employee salaries and social insurance contributions on time," the company said. "At the end of last year, we submitted a restructuring-based rehabilitation plan to the court and are making what is essentially our final effort to normalize the company through organizational reform and post-approval mergers and acquisitions (M&A)."

The company further noted, "Since the initiation of the rehabilitation process, the current administrator has led negotiations with all relevant parties, including the court, creditors, government, and political circles, and has played a key role in the sale process, which is essentially the only viable solution for Homeplus's normalization." The company expressed concern, stating, "The request for arrest warrants for these individuals could inevitably lead to the suspension and disruption of the entire rehabilitation process."

The company also emphasized, "The issue with the short-term bonds is something that can be sufficiently resolved if Homeplus is normalized," adding, "At this moment, the most important thing is to restore Homeplus to normal operations in order to minimize damage to all stakeholders, including employees, partners, and investors."