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Homeplus CEOs apologize, ask for understanding as payments are processed

Published: 14 Mar. 2025, 12:53 Updated: 14 Mar. 2025, 19:02

KIM JU-YEON
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Homeplus co-CEOs Joh Ju-yeon, right, and Kim Gwang-il apologize for the supermarket chain's shortcomings at a press conference at Homeplus's headquarters in Gangseo District, western Seoul, on March 14. [YONHAP]

Homeplus executives apologized to investors and retailers for a delay in payments due to the supermarket chain's rehabilitation process and appealed for understanding from shareholders as the company settles its debts.

"I apologize to all partners, suppliers and investors who have been inconvenienced by the rehabilitation process,” Homeplus co-CEO Joh Ju-yeon said at a press conference at the company's headquarters in Gangseo District, western Seoul on Friday.

Regarding the company's ability to pay back its debts, the CEO underscored that the company had paid over 340 billion won ($233.7 million) of commercial receivables and possessed 160 billion won in liquid assets as of Thursday, and continued to earn cash from the supermarkets' ongoing operations.

Payments are being made to small businesses and retailers first, the CEO said, while asking for large firms' understanding in the delay. The majority of commercial receivables, excluding large firms and brands, will soon be paid off, she added.

Homeplus entered corporate rehabilitation on March 4. The chain said the move was to resolve potential short-term liquidity problems stemming from an “unexpected” credit ratings drop.

The Korea Investors Service downgraded Homeplus’s crediting rating from A3 to A3- on Feb. 28, attributing it to the supermarket’s weakened profitability, poor cash-to-debt ratio and concerns about its mid- to long-term competitiveness.

MBK Partners, Homeplus’s majority stakeholder, has since been criticized by investors, who allege that the firm recklessly sold commercial papers and short-term bonds up to March 4 despite its liquidity issues. It has also taken flack from the chain's labor union, which says that many workers have been laid off since MBK Partners’ acquisition, and is concerned about branches shutting down in the future.

Kim Kwang-il, MBK Partners Vice Chairman and Homeplus co-CEO, said Friday that reports of Homeplus shutting down or selling branches as part of its rehabilitation plan were “unfounded.”

“We do not have the authority to proactively streamline operations or carry out restructuring since signing up for corporate rehabilitation,” Kim said.

He also denied that the filing for rehabilitation was premeditated. The company has been accused of issuing short-term financial bonds despite knowing of the downgrade; not only could it be illegal, the rehabilitation process could delay them repaying their financial debts, which would put the investors of such bonds at risk of losing their principal.

The company is working in collaboration with creditors and the court to ensure that all creditors, investors and workers will be compensated, he added.

Homeplus will now have to submit a rehabilitation plan by June 3. It will contain the company’s plan for shareholder rights changes, repayment methods and corrective measures, Homeplus head of compliance Im Won-hee said.

Updated, March 14: Added background on credit ratings downgrade, CEO's statement on rumors of closures.

BY KIM JU-YEON [[email protected]]