Homeplus Urges Meritz to Approve 200 Billion Won Loan

"Final Proposal Contains Unworkable Conditions"

Homeplus has requested that Meritz Securities take a more forward-looking approach, stating that Meritz Securities has effectively refused a loan of 200 billion won.

On June 18, Homeplus released a press statement titled "Our Position on the Unworkable Proposal from Meritz Financial Group," saying, “The livelihoods and workplaces of countless Homeplus partners, employees, and their families depend on Meritz’s decision. We earnestly urge Meritz Financial Group, once again, to recognize its social responsibility as a major financial institution and to positively consider the essential 200 billion won loan needed for our recovery.”

The previous day, Meritz Financial Group decided to provide 100 billion won in emergency operating funds (DIP financing) to support Homeplus’s corporate rehabilitation. However, the provision of funds was conditional on guarantees from MBK Partners and Chairman Kim Byung-joo being confirmed. In response, Homeplus stated, “The final proposal sent by Meritz contains unworkable conditions, effectively confirming that they have no intention to provide loan support. We also find it hard to accept Meritz’s explanation that ‘the requirement for MBK Partners to directly procure 100 billion won is not a precondition for the loan, but merely a request.’”

Yonhap News Agency

Homeplus emphasized that MBK Partners, its shareholder, is an asset management company rather than the actual investor in Homeplus, but has nonetheless provided direct and indirect support totaling 220 billion won since the commencement of the rehabilitation process in order to fulfill its ethical and social responsibilities. “In this process, to strengthen MBK’s limited capacity for capital procurement, key executives of MBK have even provided personal guarantees and home mortgages,” the company added.

Homeplus continued, “When both credit and support have already been provided to the limit, to additionally demand that MBK not only provide a 100 billion won joint guarantee for the Meritz DIP loan, but also directly procure another 100 billion won to support us, is to set an unattainable condition simply as a pretext to refuse the loan.”

Homeplus also pointed out Meritz’s claim that it agreed to subordinate collateral on real estate trust assets to allow MBK to self-fund the 100 billion won, stating, “Given that lenders with second-priority rights are refusing to approve additional collateral due to the commencement of rehabilitation proceedings, Meritz is well aware that this proposal is not feasible. Putting forward such unrealistic conditions can only be seen as an attempt to shift the blame for bankruptcy resulting from loan refusal.”

Homeplus concluded, “If Meritz truly does not want to see Homeplus go bankrupt, it must not delay and should make an effective and mutually beneficial decision. If Homeplus’s operations return to normal quickly through additional DIP financing, not only will Meritz be able to recover its loans in full, but it could also achieve early repayment, making this the safest option for all parties.”

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