Latest news with #SeoulBankruptcyCourt
Korea Herald
25-06-2025
- Business
- Korea Herald
Oasis rescues Tmon in cash deal, eyes e-commerce expansion
Debt-laden e-commerce platform Tmon has found a lifeline in fresh food delivery company Oasis, narrowly avoiding collapse. Most of Tmon's creditors, however, are expected to forgo repayment on more than 1 trillion won ($732 million) in outstanding debt. The Seoul Bankruptcy Court on Tuesday approved the company's rehabilitation plan through a compulsory order, clearing the way for Oasis to move forward with the acquisition. The decision comes 11 months after Tmon's large-scale liquidity crisis emerged in July, prompting court-led rehabilitation proceedings in September. Tmon submitted a debt workout plan last month centered on its acquisition by Oasis, but the proposal was rejected at a creditors' meeting last Friday after falling short of support from commercial creditors, mostly small merchants and consumers. Despite the rejection, the court granted approval, citing that the plan "serves the interests of all stakeholders — including secured and unsecured creditors and employees." The approval was conditional on including protective measures for commercial creditors, as outlined in the plan. Oasis is acquiring Tmon for 11.6 billion won through a full equity purchase via new share issuance. Industry estimates suggest an additional 6.5 billion won will be needed to cover unpaid wages, severance and other outstanding liabilities. The online grocery market is funding the deal entirely in cash. As of the end of last year, Oasis held around 150 billion won in cash and cash equivalents. Its debt-to-equity ratio stood at 42 percent, and its current ratio at 324 percent — figures that point to solid financial health. Oasis, focused on overnight grocery delivery, has grown steadily since launching its online service in 2018. Founded in 2011 as a store-based organic food retailer, it leveraged an expansive producer network to go digital. Last year, it posted 517.1 billion won in revenue and 22.9 billion won in operating profit — up 9 percent and 27 percent, respectively — remaining the only overnight grocery delivery firm to turn an annual profit. The company aims to grow its e-commerce market share through the acquisition. Oasis currently has just 2 million members — a fraction of market leaders Kurly and Coupang, each with over 10 million users. Tmon, which has expanded aggressively through an open-market model, is estimated to have 4 to 5 million active users, potentially more than tripling Oasis's user base. The acquisition is expected to bolster Oasis ahead of its planned initial public offering. The company is owned by Kosdaq-listed tech firm Gaeasoft. Oasis plans to operate Tmon as a separate entity to preserve its brand value, avoiding a physical merger. Tmon will relaunch its marketplace and explore new business models to expand its presence in the fast-delivery sector. Meanwhile, the rehabilitation plan is drawing backlash from creditors, as only 10 billion won of Oasis's acquisition payment will go toward debt repayment — less than 0.8 percent of Tmon's total outstanding debt of approximately 1.2 trillion won. Oasis has pledged to support Tmon's recovery, vowing to implement the industry's lowest commission rates and a next-day settlement system to assist previously affected sellers. It also plans to inject additional funds to cover employee salaries and operating costs.
Korea Herald
04-03-2025
- Business
- Korea Herald
Homeplus granted corporate rehabilitation amid credit woes
The Seoul Bankruptcy Court announced Tuesday that it had approved the corporate rehabilitation request filed by South Korean supermarket chain Homeplus, initiating prompt proceedings just 11 hours after the filing. 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.
