Latest news with #Homeplus
Korea Herald
2 days ago
- Business
- Korea Herald
Homeplus to close 15 stores, offer unpaid leave amid financial strain
South Korean hypermarket chain Homeplus, under court-led restructuring, will close 15 leased stores and offer voluntary unpaid leave to employees as part of sweeping cost cuts ahead of a pre-rehabilitation merger and acquisition. The moves come five months into the court-led rehabilitation process, following Homeplus's entry into receivership in March. Last month, the company secured court approval to pursue an M&A ahead of its formal rehabilitation plan. Of its 68 leased locations, Homeplus said it will close those where rent negotiations with landlords have been deadlocked. Beginning next month, it will also offer voluntary unpaid leave to all headquarters employees. Cuts to executive management pay, introduced in March, will remain in place until the rehabilitation is complete. In a message to all employees on Wednesday, CEO Joh Ju-yeon warned that 'the court-approved pre-rehabilitation merger and acquisition could be in jeopardy if the current situation persists,' adding that the company has little choice but to enter 'survival management.' According to the company, its credit standing has deteriorated since entering rehabilitation, further straining cash flow as major suppliers shorten payment cycles and demand upfront payments or new deposits. Since trade payables are treated as priority claims under the rehabilitation process, the company said it is important to rebuild cooperation with suppliers by restoring normal payment cycles and credit limits. The company's union denounced the measures, saying they weaken the brand's value rooted in its nationwide store network. 'Abandoning these stores is tantamount to giving up on Homeplus,' a union official said, adding that the decision contradicts MBK Partners' earlier pledge to sell the company as a whole rather than piecemeal.
Korea Herald
5 days ago
- Business
- Korea Herald
Homeplus sale tests Coupang's appetite for offline retail push
While Coupang stays silent, example of Amazon, Whole Foods shows potential upside As Homeplus, Korea's No. 2 discount supermarket chain, continues its court-led rehabilitation saga following its March filing, its future still hangs in the balance, now up for sale through a full-package merger and acquisition process ahead of its restructuring. While speculation swirls over which players may step in, market watchers point to e-commerce giant Coupang as best positioned to acquire the chain, becoming a full-spectrum retail powerhouse at the same time. That, in turn, begs the question: Is the online titan bold enough to take a leap of faith on this distressed asset to ultimately morph into a real-world presence? Highly viable contender While no definitive suitor has yet stepped forward to acquire Homeplus, industry insiders have suggested retail operators, such as Coupang, the National Agricultural Cooperative Federation, Shinsegae's E-mart and Lotte. They largely ruled out financial investors due to ongoing uncertainty in the hypermarket sector. Coupang's viability as a bidder stems from its financial capacity to absorb Homeplus's distressed debt while retaining ample headroom for further capital investment. As of the end of last year, Coupang held 5.77 trillion won ($4.14 billion) in cash and equivalents, with a net cash position of 2.08 trillion won after debt. 'Only Coupang has the capital, the infrastructure and the strategic ambition to make Homeplus work,' said one industry official. Homeplus's estimated liquidation value stands at 3.7 trillion won, higher than its going-concern value of 2.5 trillion, which, according to the company, reflects an asset base that exceeds liabilities by roughly 4 trillion won. The retailer holds total assets of 6.8 trillion won, of which around 2.9 trillion won are liabilities. In this light, the company stated that the sale price could fall below 1 trillion won if the buyer utilizes a real estate–backed financing structure. Immediate management control would also be possible without acquiring existing shares, as private equity owner MBK Partners has signaled its willingness to forgo its 2.5 trillion won equity stake. Click-to-brick expansion Coupang would also stand to gain meaningfully from the acquisition, much like its American counterpart, Amazon, did with its $13.7 billion purchase of Whole Foods in 2017. Since its merger with Amazon, Whole Foods has increased its store count by 15 percent and grown sales by 40 percent as of last year. In 2023, Coupang founder and CEO Kim Bom projected that Korea's retail market could surpass $700 billion, underscoring the vast untapped potential. Homeplus owns 126 hypermarkets and 308 smaller-format stores across the country — locations that could immediately boost Coupang's already impressive logistics capabilities. It would add a nationwide network for food distribution, last-mile fulfillment, and physical brand presence, particularly outside the Seoul area, where its current networks are weaker. Industry officials note that a broader physical footprint could deepen the company's understanding of its consumers and strengthen brand loyalty. 'For Coupang, which currently has no market share in offline retail, acquiring Homeplus could immediately elevate its presence as a brick-and-mortar player,' said one industry insider. 'The deal could enable the company to complete an Amazon-style model within the Korean market.' Still, whether the online retail giant, so far silent on any formal bid, will make a move is unclear. There are a host of complicating factors that could be giving Coupang pause, including industry stagnation, labor union resistance and Homeplus's continued financial underperformance. Homeplus posted an operating loss of 314.2 billion won last year, marking its fourth consecutive year in the red. The company's labor union, which has condemned the proposed sale by MBK Partners as an 'attempt to strip assets and exit,' is calling for direct government intervention and regulatory oversight should an M&A proceed. Setting aside these concerns, Coupang's potential move into physical retail could give it a an edge in an e-commerce landscape increasingly defined by fierce competition — from deep-pocketed rival Naver to fast-rising Chinese players like AliExpress and Temu. 'Traditional (online) marketplaces may face an uphill battle competing against Naver, which is backed by substantial financial resources,' said one e-commerce industry insider. According to data from analytics firm WiseApp Retail, Coupang led the domestic market in gross merchandise volume last year with a 22.7 percent share, narrowly ahead of Naver's 20.7 percent.
Yahoo
23-06-2025
- Business
- Yahoo
Seoul Bankruptcy Court approves Homeplus' M&A deal
The Seoul Bankruptcy Court in South Korea has approved the pursuit of a merger and acquisition (M&A) deal by discount store chain Homeplus before a court ruling on its rehabilitation plan. The move is designed to facilitate the repayment of creditors and secure employment for the company's workforce. The court's approval allows Homeplus to select an M&A adviser and proceed with the deal, ensuring terms that are favourable to all parties, including creditors and employees. Homeplus, which filed for corporate rehabilitation in March 2025, must submit its rehabilitation plan by 10 July. The decision to allow the chain to engage in an M&A deal comes after its corporate bonds were downgraded due to financial health concerns. Samil PricewaterhouseCoopers, a court-appointed accountancy company, has been recommended to oversee the sale process, which is expected to take two to three months. MBK Partners, the private equity company that owns Homeplus, has committed to supporting the sale and plans to write off Won2.5tn ($1.83bn) worth of common shares, as reported by Reuters. The court's statement highlighted the benefits of the sale, which include channelling funds into the company, repaying debts and avoiding bankruptcy to protect partner companies. Following Homeplus' request for court-assisted rehabilitation, MBK Partners has faced scrutiny from various regulatory authorities. The National Tax Service has initiated a tax probe while the Korea Fair Trade Commission is investigating potential insider trading involving MBK Partners, Homeplus and Lotte Card, a local card issuer. The Financial Supervisory Service (FSS) is examining MBK Partners' role in the issuance of short-term bonds for Homeplus, amid concerns that it may have been planning the court-led rehabilitation covertly. "Seoul Bankruptcy Court approves Homeplus' M&A deal" was originally created and published by Retail Insight Network, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
20-06-2025
- Business
- Reuters
Struggling retailer Homeplus gets approval for sale plan from South Korean court
SEOUL, June 20 (Reuters) - A South Korean court approved on Friday grocery retailer Homeplus's plan to sell the struggling company, in a move that the court said was aimed at providing funds to repay creditors and to ensure job security for employees at the company. In March, MBK Partners, a private equity firm which owns the company, filed for a court-led restructuring of Homeplus, marking a setback to the firm's marquee, $6.1 billion deal made more than a decade ago. A spokesperson for MBK said on Friday it will support the successful sale of the company and plans to write off 2.5 trillion won ($1.83 billion) worth of common shares that it holds in the company as part of the sale. The Seoul Bankruptcy Court approved a plan to appoint accounting firm Samil PricewaterhouseCoopers to manage the sale, which will take two of three months, the court said in a statement. The court said the sale would help channel funds into the company and pay back debts to its creditors, while guaranteeing the job security of Homeplus employees and protecting partner firms by avoiding bankruptcy. ($1 = 0.7424 pounds) ($1 = 1,369.2100 won)
Reuters
13-06-2025
- Business
- Reuters
MBK plans to sell its troubled Korean supermarket chain Homeplus
SEOUL/HONG KONG, June 13 (Reuters) - MBK Partners is seeking to sell its embattled South Korean supermarket chain Homeplus by issuing new shares, to avert liquidation of the retailer, the Northeast Asia-focused private equity firm said on Friday. 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)
