MBK plans to sell its troubled Korean supermarket chain Homeplus
The firm will then cancel shares worth 2.5 trillion Korean won ($1.83 billion) it currently owns in the company as it hands over control of Homeplus to the new buyer, according to a statement.
MBK's cancellation of its Homeplus shares would translate into a hefty loss on what was Asia's biggest leverage buyout a decade ago.
In March, MBK filed for a court-led restructuring of South Korea's No. 2 grocery retailer to avoid bankruptcy of the firm, which is still reeling from the fall-out of the COVID-19 pandemic and growing competition from e-commerce rivals.
A recent court-commissioned review showed the retailer's liquidation value was higher than its value as a going concern, MBK said in its statement.
In a separate statement on Thursday, Homeplus said the company had a liquidation value of 3.7 trillion won, with 6.8 trillion won of total assets.
The sale will target strategic buyers, said a person familiar with the situation.
In 2024, MBK launched a sale process for Homeplus Express, the supermarket business of Homeplus, said the source and a second one with knowledge of the matter.
But that process stopped when Homeplus entered court-led restructuring, the first source said.
Both sources sought anonymity as the information was not public.
The firm led a consortium in 2015 to buy Homeplus from Britain's Tesco (TSCO.L), opens new tab for 4 billion pounds ($6.1 billion) with co-investments from Canada Pension Plan Investment Board (CPPIB), Canada's Public Sector Pension Investment (PSP) and Singapore state investor Temasek.
The consortium provided equity of 3.2 trillion won and funded the deal with 2.8 trillion of debt, MBK said.
CPPIB, which co-invested $534 million for a 21.5% stake in Homeplus according to its disclosure back then, had earlier written off its investment and exited the company, said a third person with knowledge of the matter.
PSP and Temasek each held a smaller stake than CPPIB respectively, according to a fourth person with knowledge of the matter. The two firms have not disclosed their holdings in Homeplus.
CPPIB, PSP and Temasek, who are also limited partners in MBK's private equity funds, declined to comment on their Homeplus investments.
MBK declined to comment on the co-investors.
South Korean prosecutors are investigating whether MBK Partners approved Homeplus's debt issue in 2025 despite prior knowledge of a credit downgrade for the retailer. MBK has denied the accusation.
In May, prosecutors banned foreign travel by the chairman of MBK Partners, Kim Byung-ju, in their investigation.
($1=1,369.6 won)
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