Homeplus: "Meritz Could Earn 500 Billion Won in Interest If We Go Bankrupt"

Homeplus: "20% Overdue Interest Charged Even When Normal Operations Are Impossible"

"500 Billion Won in Interest Earned in Just Two Years and Six Months"

Homeplus has disclosed specific details, stating that if the company files for bankruptcy, Meritz Financial Group could earn 500 billion won in interest income.

Yonhap News Agency

On June 23, Homeplus claimed that Meritz Financial Group could earn 500 billion won in interest income just two years and six months after extending a 1.3 trillion won loan to Homeplus, and made public the basis for this claim.

According to Homeplus, after Meritz Financial Group provided a 1.3 trillion won loan through refinancing in April last year, it has so far received 256.1 billion won in principal and interest (134.8 billion won in principal, and 121.3 billion won in interest and fees).

Homeplus stated, "If Homeplus fails to successfully restructure and goes bankrupt in the future, Meritz Financial Group will recover a total of 1.56 trillion won—including the principal, the full repayment amount, and overdue interest applied at a high annual rate of 20%—by liquidating 64 stores secured through collateral trust via auction."

The company continued, "It may take some time for Meritz Financial Group to dispose of the trust-collateralized real estate, but regardless of how long it takes to recover the full principal through this sale, an annual overdue interest rate of 20% will be applied to the outstanding balance during that period." They added, "For reference, 1.56 trillion won is the total amount secured by Meritz as collateral on the relevant real estate."

Homeplus also stated, "Even when we were unable to pay employees' wages on time or pay suppliers for goods—causing disruptions to normal business operations due to a lack of working capital—Meritz Financial Group continued to charge overdue interest at the legal maximum annual rate of 20%. If you add the 256.1 billion won already received to the future recoverable amount of 1.56 trillion won, the total amount Meritz Financial Group could recover in the event of Homeplus bankruptcy would be 1.8161 trillion won."

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