Homeplus Gets Breathing Room as Court Approves Rehabilitation Plan (Comprehensive)

75.9% of Rehabilitation Creditors Approve, Exceeding Legal Requirement
Additional Loans Planned in 2030 and 2037 to Repay Remaining Debt

Homeplus, currently undergoing corporate rehabilitation proceedings, has received court approval for its rehabilitation plan with creditor consent. This landmark was achieved about one year and six months after entering rehabilitation proceedings in March 2025. While the company has averted immediate bankruptcy, challenges such as repaying public-interest claims, selling stores, and normalizing operations remain ahead.

On September 2, the 4th Division for Rehabilitation of the Seoul Bankruptcy Court (Presiding Judge: Chief Judge Jeong Junyoung) held a meeting of stakeholders for the review and resolution of the Homeplus rehabilitation plan and granted approval. The court stated, “It is recognized that the requirements for approval of the rehabilitation plan under the Debtor Rehabilitation and Bankruptcy Act have been met.” The approval took effect immediately upon pronouncement.

75% Creditor Approval... Selling Self-Owned Stores for Repayment

The Homeplus rehabilitation plan exceeded the required threshold in every voting class. Both secured creditors and shareholders voted 100% in favor. Among unsecured rehabilitation creditors, approximately KRW 1.8836 trillion out of a total of KRW 2.4816 trillion in voting rights approved the plan, generating a 75.9% approval rate. The requirements for approval are over 75% for secured creditors, over 66.7% for unsecured rehabilitation creditors, and over 50% for shareholders. The court noted that over two-thirds of public-interest creditors agreed to installment repayment, which contributed to its decision to grant approval.

Homeplus plans to sell, by February 2028, 19 out of 37 company-owned stores already slated for closure. The proceeds will first be used to repay KRW 1.3 trillion in senior secured trust claims held by Meritz Financial Group. Next, Homeplus will secure additional loans in 2030 using 38 self-owned stores that will continue to operate as collateral, and either expand or refinance the loans in 2037 to secure funds for repaying the remaining claims. The appraised value for the 38 self-owned stores has been estimated by Homeplus at KRW 2.8 trillion. If asset sales and operational normalization proceed as planned, the company also intends to renew its pursuit of a merger and acquisition (M&A) involving Homeplus itself.

Claims with senior and subordinated secured interests in both trust claims and store properties will be repaid in priority using the proceeds from the asset sales. Depending on the store sale timing, repayment periods for some collateralized claims may be extended for up to three years. Claims without security such as card payments, trade payables, recourse claims, and damages will have principal and pre-rehabilitation interest repaid over years 5 through 10. Interest accruing after commencement of rehabilitation proceedings will be waived. All existing shares will be canceled in full without compensation.

The court-appointed investigative accountant, Samil PwC, determined that the repayments promised under the rehabilitation plan would exceed the estimated amount in a liquidation scenario, fulfilling the principle of guaranteeing liquidation value. They further concluded that, considering cash generation from operations, sale of owned stores, and new financing plans, Homeplus can viably implement the plan.

Kim Kwangil, legal administrator of Homeplus, stated, “Our top priority is to secure profitability and settle debts by closing loss-making stores and reducing fixed costs,” adding, “We have reduced monthly rent by more than KRW 20 billion and monthly labor costs by more than KRW 26 billion.”

Kim Kwangil, Vice Chairman of MBK, is speaking at the MBK Partners-Meritz management meeting for Homeplus revival held at the National Assembly Members' Office Building on July 9, 2026. Photo by Hyunmin Kim

Over KRW 500 Billion in Public-Interest Claims and Normalizing Operations Remain Challenges

Many hurdles remain before the rehabilitation plan can be fully realized. First and foremost, Homeplus must repay over KRW 500 billion in public-interest claims, including unpaid balances to suppliers. These claims are not subject to a creditors’ vote for the plan but must be paid prior to ordinary unsecured claims. If public-interest creditors who did not agree to installment repayment demand lump-sum payment, it could create renewed liquidity pressure for Homeplus.

Restoring business competitiveness is also crucial. According to Homeplus, during the reopening of 67 locations nationwide between August 13 and August 30, the company’s sales reached KRW 116.4 billion—an increase of 57% over the same period before business suspension. The number of customers also increased by 38%. However, the hypermarket sector has been in prolonged stagnation, and Homeplus’s creditworthiness and operational strength have weakened during the rehabilitation proceedings. Some vendors still have not resumed deliveries, leading to incomplete assortment, and staff reductions are causing store management problems. There is also uncertainty regarding whether store sales will proceed as planned, with many of the 19 stores targeted for sale located in regional areas, making it difficult to find buyers.

The Homeplus rehabilitation proceedings faced many twists and turns, including a previous decision to terminate. On July 3, the court decided to end the process due to Homeplus’s failure to secure the minimum KRW 200 billion in working capital. However, after Homeplus immediately appealed, securing a KRW 200 billion emergency working capital loan commitment from Meritz Financial Group, the court revoked its earlier decision and resumed the proceedings on July 21. Homeplus stated, “We will faithfully implement the court-approved rehabilitation plan to ensure the repayment scheme proceeds as planned.”

This content was produced with the assistance of AI translation services.