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Korea Herald
6 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
06-03-2025
- Business
- Korea Herald
US politicians voice worries over MBK's takeover of Korea Zinc
US House of Representatives members and other political figures have expressed concerns over private equity firm MBK Partners' attempt to acquire Korea Zinc, the world's largest zinc smelter, arguing that the deal could expand China's control over critical minerals and undermine US national security. Rep. Mariannette Miller-Meeks, a Republican member of the US House of Representatives and a member of the House Committee on Energy and Commerce, urged the US Congress and administration to collaborate on strategies to counter China's growing influence in the mineral and resources sectors. She conveyed this message in a letter sent on Wednesday to Diane Farrell, the acting Deputy Under Secretary for International Trade at the US Department of Commerce. In her letter, Rep. Miller-Meeks emphasized the need for the US to secure independent and resilient supply chains by enhancing domestic mining capabilities and investing in allied partnerships. 'I have been informed that China-linked entities are attempting to gain control over Korea Zinc through a hostile takeover attempt led by MBK Partners,' the letter she posted on social platform X read. 'This is an industry dominated by China, and independent entities like Korea Zinc play a crucial role in supplying critical materials, including those now under China's export restrictions.' Korea Zinc produces several rare metals crucial for semiconductor manufacturing, renewable energy and defense projects directly tied to US security interests. These include antimony, indium, tellurium and cadmium, all of which China has restricted from exporting. Another member of the House of Representatives, Rep. Zach Nunn, echoed Miller-Meeks' concerns in his letter to Farrell sent on Feb. 19. 'If the Chinese Communist Party is successful in gaining influence over Korea Zinc, it will further China's control over critical mineral supply chains, heightening the risks of economic coercion and technology leakage,' he said. Vin Weber, a former member of the US House of Representatives, added that there are legitimate reasons to fear that China-based or China-financed entities might be welcomed into transactions due to MBK Partners' focus and investment history. 'This could lead to both a widespread technology transfer to Chinese entities as well as the dismantling of an important global player in the joint United States-Korea effort to insulate and expand critical minerals supply chains away from the People's Republic of China,' he wrote in his letter to Geoffrey Pyatt, assistant secretary of state for energy resources, in January. The coordinated letters signal a growing concern that MBK's takeover attempt could pose risks to US efforts to work with allies to strengthen critical minerals supply chains. This comes as the MBK-Young Poong alliance and Korea Zinc await a Seoul court decision that could significantly impact control over the company's management. MBK has filed an injunction to nullify the resolutions passed at an extraordinary shareholders' meeting that favored Korea Zinc Chairman Choi Yun-beom. Questions about MBK management's ability to effectively run Korea Zinc have intensified, given its history of prioritizing short-term profits. This concern was further highlighted by the recent corporate rehabilitation request filed by Homeplus, the hypermarket chain acquired by MBK in 2015. The 7.2 trillion won ($5 billion) deal garnered much attention as the largest buyout in history across the Asia-Pacific region. But the firm was found to have raised about 5 trillion won from external sources during the acquisition, only to struggle with rising financial costs.
