Homeplus granted corporate rehabilitation amid credit woes
On Tuesday morning, Homeplus announced that it had filed for corporate rehabilitation as a preemptive measure to address potential funding issues following its recent credit rating downgrade.
The court's decision to approve the proceedings was based on the assessment that a funding shortage could arise around May if the financial structure did not improve, despite the chain not being in default, due to the downgrade of its commercial paper credit rating.
Homeplus will be able to proceed with the rehabilitation process while its normal operations continue without disruption. The deadline for submitting the rehabilitation plan is June 3.
The court also ruled to uphold the company's current co-CEO system during the preemptive restructuring process, led by CEO Joh Ju-yeon and MBK Partners Vice Chairman Kim Kwang-il. In 2015, private equity fund MBK Partners acquired Homeplus for 7.2 trillion won ($4.9 billion).
Homeplus's rehabilitation filing came as its improved sales and debt ratio were not adequately reflected in its credit evaluation, the company stated, leading Korea Investors Service to downgrade its credit rating from A3 to A3- on Friday.
The credit agency attributed the rating cut to weakened profitability, high financial burdens and uncertainty surrounding mid- to long-term business competitiveness.
'We applied for rehabilitation proceedings to ease short-term debt repayment, as the lowered credit rating could potentially cause funding issues,' an official from Homeplus said, emphasizing that the move is only a preventive measure.
As of January, Homeplus reported a debt ratio of 462 percent and annual sales of 7.04 trillion won, reflecting a 1,506 percent improvement in its debt ratio and a 2.8 percent increase in sales compared to the previous year.
Although annual revenue had been on a four-year decline, dropping from 7.65 trillion won in 2018 to 6.48 trillion won in 2021, sales figures have trended upward in the past three years, reaching 6.6 trillion won in 2022 and 6.93 trillion won in 2023.
In 2023, the company posted operating losses of 199.42 billion won, narrowing the 260.18 billion won loss from the year before.
Excluding lease liabilities that account for all rent during the remaining contract period, Homeplus's actual financial debt, including operating funds borrowing, stands at about 2 trillion won. With over 4.7 trillion won in real estate assets, the company expects a smooth restructuring process with financial creditors under the rehabilitation plan.
The company stated that deferring financial debt through rehabilitation will improve future cash flow by reducing financial burdens. Since most of its sales are cash-based, the company generates a surplus of about 100 billion won within just one or two months.
While bond redemptions will be suspended during the rehabilitation proceedings, general business dealings with partner companies will be settled in full, and employee salaries will continue as usual, the company explained.
'Supermarket chains have faced challenges over the past decade, including regulatory pressures, the post-COVID shift to online shopping, and the rise of e-commerce. Despite this, we have achieved sales growth for three consecutive years and remain committed to improving business performance,' the company official said.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Korea Herald
11 hours ago
- Korea Herald
Hanwha Vision's AI CCTVs deployed in Lima district for public safety
MEXICO CITY -- Hanwha Vision, a South Korean security system solution provider, has supplied some 2,000 artificial intelligence CCTV cameras to a district in Peru's capital region, marking one of the largest overseas deployments of its advanced surveillance technology to date, according to local officials Friday. Santiago de Surco, one of the districts in the Peruvian capital of Lima, said it has opened a new central monitoring center equipped with Hanwha Vision's AI-based cameras. The Hanwha Vision cameras installed include models with built-in license plate recognition technology and 360-degree multi-sensor monitoring capabilities. They are also programmed to detect abandoned objects and unusual behavior in public spaces using AI algorithms. "By providing analytics that automatically classify people and vehicles, our system helps reduce false alarms and improve monitoring efficiency, which we believe will greatly contribute to crime prevention," said Byun Sang-tae, head of Hanwha Vision's Mexico subsidiary. The municipality aims to reduce its crime rate by nearly half within six months in close cooperation with the Peruvian national police. An opening ceremony for the monitoring center was held the previous day, attended by senior Peruvian government and police officials, along with South Korean Ambassador to Peru Choi Jong-uk. The district, home to major shopping malls, parks and the U.S. Embassy, is regarded as one of the most dynamic and rapidly developing districts within the Lima metropolitan area.
Korea Herald
15 hours ago
- Korea Herald
Trump says US could unveil semiconductor tariffs next week
WASHINGTON -- US President Donald Trump said Friday his administration will unveil tariffs on semiconductor imports as early as next week, as South Korean tech firms Samsung Electronics Co. and SK hynix Inc. have been carefully watching his tariff policy developments. Trump made the remarks in a meeting with reporters aboard Air Force One, as he was en route to Alaska for talks with Russian President Vladimir Putin -- the high-stakes meeting where Trump is seeking to broker a halt to the war in Ukraine. "Chips and semiconductors, we'll be setting sometime next week, (or) the week after," Trump said, according to a White House press pool report. He did not elaborate on the exact tariff rate, but said there would be a tariff increase from a "lower" rate to a "very high" rate. "Well, I'm going to have a rate that is going to be lower at the beginning. Then that gives them a chance to come in and build. And very high after a certain period of time," he said. "And if they don't build here, they have to pay a very high tariff." Last week, Trump said his administration will impose a tariff of about 100 percent on chips, as he is pushing to strengthen semiconductor production in the U.S. To impose the tariffs, Trump has invoked Section 232 of the Trade Expansion Act of 1962, a law that provides the president with the authority to adjust imports into the US when he determines they threaten to impair national security. (Yonhap)
![[Exclusive] Consulting firm hired by Hyundai Rotem under investigation in Poland](/_next/image?url=https%3A%2F%2Fwimg.heraldcorp.com%2Fnews%2Fcms%2F2025%2F08%2F15%2Fnews-p.v1.20250815.6a20b5c6c5ce43828bf2426464fd3b30_T1.jpg&w=3840&q=100)
Korea Herald
2 days ago
- Korea Herald
[Exclusive] Consulting firm hired by Hyundai Rotem under investigation in Poland
Hyundai Rotem confirmed Friday that it had signed a consulting contract with a Polish firm that is currently under investigation by local authorities for alleged invoice falsification. The company stressed that the agreement complied with the law and followed standard international defense export practices, indicating no involvement in the probe. The company's statement followed an Aug. 8 report by Polish broadcaster Tvn24, which said prosecutors, tax officials and counterintelligence authorities are investigating a Warsaw-based consulting firm that received nearly 100 million zloty ($27.3 million) from a South Korean arms manufacturer between 2022 and 2023. The report was released without the name of the consulting company or which South Korean arms exporter had signed the contract. The consulting firm is suspected of issuing potentially fraudulent invoices related to weapons procurement contracts signed between South Korea and Poland. Citing Polish government data, the report said the company was established in 2019 by two Korean nationals. While no charges have been filed, investigators are looking into possible illegalities in the flow of funds from the firm to possible third-party recipients, it added. Mariusz Blaszczak was Poland's defense minister when the first K2 tank deal was signed in 2022. Reports have suggested that the ongoing investigation may be politically motivated, potentially targeting Blaszczak. The ongoing investigation centers on whether two multimillion-zloty invoices issued by the consulting firm contained false statements that could affect public debt assessments — a violation that carries a maximum sentence of 25 years in prison under Polish criminal law. The report did not name specific Korean companies that the consulting company had worked with. However, it listed arms imported by Korean companies such as K2 Black Panther tanks, K9 self-propelled howitzers and FA-50 fighter jets. Meanwhile, an industry source in Seoul told The Korea Herald on Friday that among the three — K2 maker Hyundai Rotem, K9 self-propelled howitzer manufacturer Hanwha Aerospace and FA-50 fighter jet producer Korea Aerospace Industries — Hyundai Rotem was the only company confirmed to have used a local agent in Poland. When asked by The Korea Herald, Hyundai Rotem acknowledged that it had signed the contract to support its 2022 K2 tank exports to Poland. 'It was our first export contract with Poland, and as is customary in overseas defense deals, we worked with a local agent familiar with on-the-ground conditions,' a Hyundai Rotem spokesperson told The Korea Herald. The company's spokesperson added that the deal was reviewed and cleared by both the Polish Armament Agency and South Korea's Defense Acquisition Program Administration. 'There are no legal issues with our transactions. Both DAPA and the Polish Armament Agency have confirmed this,' the spokesperson said, adding that the invoices under investigation appear to have been issued by subcontractors of the consulting firm — not by the agent itself or Hyundai Rotem. DAPA also confirmed that Hyundai Rotem had formally contracted the local firm, and said the scope of services and fee structure were consistent with anti-corruption guidelines. 'Using a local agent is legal under Polish regulations, provided strict transparency and oversight requirements are met,' a DAPA official told The Korea Herald on Friday. Hyundai Rotem described the Polish contractor as a general trading company that provided legal and cultural support essential for overseas military exports. The company added that it had also worked with another local agent for a recent contract in Peru, where it similarly lacked a local network. Romania is also reportedly being considered as the company's next partner country, where it currently has no established local presence. Meanwhile, Hyundai Rotem also noted that while the 100 million zloty payment may appear sizable, it accounted for just 0.0084 percent of the overall contract value. In 2022, the company signed a deal to export 180 K2 tanks to Poland worth approximately 4.5 trillion won ($3.24 billion). More recently, on Aug. 1, South Korea and Poland signed an additional agreement for more K2 tanks, in a ceremony attended by South Korean Defense Minister Ahn Gyu-baek and Polish Deputy Prime Minister and Defense Minister Wladyslaw Kosiniak-Kamysz. The event followed a contract previously signed by Hyundai Rotem CEO Lee Yong-bae and Polish Armament Agency head Artur Kuptel, according to South Korea's Defense Ministry. Since Russia's invasion of Ukraine in 2022, Poland has sharply increased its defense spending, emerging as one of the largest buyers of South Korean arms. According to the Korea International Trade Association, Poland's imports of Korean defense equipment — including K2 tanks, FA-50 jets and K9 howitzers — amounted to approximately 19.4 trillion won in 2022. Hyundai Rotem has been among the main beneficiaries, with its stock price on the benchmark Kospi rising from 17,650 won in January 2022 to a peak of 225,500 won in June 2025, before settling around 179,900 won.
