Homeplus addresses liquidity concerns with six-month rollover

A Homeplus outlet in Seoul [YONHAP]

Homeplus dismissed concerns about possible liquidity problems on Tuesday following a recent debt rollover.

The discount chain was obligated to pay 300 billion won ($220 million) to Meritz Securities by the end of December but demanded the six-month rollover, which was accepted by the securities firm, a company spokesperson said.

The rollover sparked concerns regarding the company's ability to could repay another loan worth 500 billion won that will mature in October.

“We have agreed with Meritz and the financial institutions on the rollover of the loans valued at a combined 800 billion won,” the spokesperson said without elaborating.

The company has reportedly paid back nearly 4 trillion of the 4.3 trillion won loan that it owes.

In 2015, private equity fund MBK Partners acquired a 100 percent stake in Homeplus for 7.2 trillion won, including 4.3 trillion won in loans, from British retailer Tesco.

Homeplus operates 131 stores nationwide as of February, down from more than 140 in 2015.

The company posted an operating loss of 260.2 billion won in the fiscal year that ended in February 2022.

Last February, Korea Investors Service lowered the credit rating of Homeplus' corporate bonds from A3+ to A3 due to the company's continued operating losses and lack of competitiveness compared to bigger rivals such as Emart.

Homeplus faces credit evaluation this week.

Yonhap