Homeplus said Thursday that its union, majority shareholder MBK Partners and top creditor Meritz Financial Group have agreed to inject 200 billion won ($134 million) in emergency funds to restart the company's court rehabilitation proceedings.
Under the agreement, MBK Chairman Kim Byung-ju will provide a joint guarantee for a 200 billion won debtor-in-possession loan. Meritz, on that basis, will proceed with the DIP financing and cooperate actively in the rehabilitation plan approval process.
The Mart Industry Labor Union and the General Labor Union will work to minimize the company's financial burden during the closure of 37 stores, with the funds secured through that process to be used for restoring normal operations, including product procurement.
The DIP financing deal had been on the verge of collapse due to differences between MBK and Meritz, but the two sides reached an agreement through mediation by Rep. Yoo Dong-su of the Democratic Party of Korea, who heads the Homeplus normalization task force, according to sources.
Homeplus plans to file an immediate appeal with the Seoul Bankruptcy Court on Monday, reflecting the terms of the agreement. Once the court grants approval, the necessary procedures for executing the DIP financing are completed, and key creditors consent to the rehabilitation plan, the emergency operating funds will be disbursed.
On that foundation, Homeplus intends to complete its structural overhaul and pursue the sale of its remaining business units — including its headquarters, hypermarket operations and online business — to bring the rehabilitation process to a successful close.
Hypermarket stores that suspended operations Monday are expected to draw up a schedule for resuming business in consultation with suppliers, once the Seoul Bankruptcy Court issues a decision extending the rehabilitation proceedings through the immediate appeal.
"This agreement goes beyond simply securing operating funds," Homeplus said. "It is significant in that it has built consensus among key stakeholders needed to continue the rehabilitation proceedings. If major creditors follow with their consent to the rehabilitation plan, the likelihood of plan approval will increase considerably."
spa@heraldcorp.com
