Seoul court extends rehabilitation proceedings of HomePlus: YTN

Seoul court extends rehabilitation proceedings of HomePlus: YTN

Seoul Court Weighs Extension of Homeplus Rehabilitation Amid Funding Uncertainty

The Seoul Rehabilitation Court is set to decide whether to extend the corporate rehabilitation proceedings for Homeplus, a once-dominant South Korean hypermarket chain, as its restructuring efforts face mounting challenges. With the court's initial one-year rehabilitation period nearing its March 4 deadline, stakeholders are closely monitoring whether the court will grant a six-month extension or allow the company to proceed toward liquidation according to court proceedings.

Homeplus's rehabilitation plan, submitted in December 2025, hinges on securing 300 billion won ($240 million) in debtor-in-possession (DIP) financing to stabilize operations and facilitate the sale of its Homeplus Express division. However, major creditors—including Meritz Securities and Korea Development Bank—have refused to support the funding request, leaving MBK Partners, the company's controlling shareholder, as the sole backer. MBK Chairman Kim Byung-joo has pledged 100 billion won in emergency financing, using personal assets as collateral, but this amount falls far short of the required capital.

Industry analysts remain skeptical about the plan's viability. A retail official noted that the rehabilitation structure "can only be completed when a buyer emerges," yet no viable bidders have materialized despite multiple attempts to sell core assets according to industry analysis. Meanwhile, a liquidation valuation conducted by Samil PricewaterhouseCoopers in May 2025 revealed that Homeplus's liquidation value exceeds its going-concern value by 1.2 trillion won, raising questions about the economic rationale for continued restructuring.

The court is also considering an "exclusion decision," which would bypass creditor votes and directly determine whether the rehabilitation plan is unworkable, potentially accelerating liquidation. If extended, the additional time may allow for further negotiations but is unlikely to resolve the fundamental issues of funding and buyer uncertainty.

A liquidation would have significant ripple effects on South Korea's retail ecosystem, including store closures, employment losses, and supply chain disruptions. Some industry observers advocate for out-of-court restructuring led by MBK to expedite operations, though this approach carries risks if external financing delays persist as industry observers note.

With the court's decision imminent, Homeplus's fate remains uncertain, underscoring the fragility of its business model in a rapidly evolving retail landscape.