Homeplus-emergency funds
Homeplus requests emergency funds from largest creditor, Meritz Securities
SEOUL, May 17 (Yonhap) -- Financially troubled discount store chain Homeplus Co. on Sunday again requested emergency operating loans from its largest creditor, Meritz Securities Co.
"Meritz controls most of the retailer's key assets through collateral trusts, leaving the company with few options to secure operating funds independently," Homeplus said. "At this point, Meritz is the only entity capable of providing emergency operating loans."
Meritz, however, said it is reviewing a bridge loan request but requires firm repayment guarantees because of concerns over potential breach-of-trust liabilities.
Homeplus recently sold its supermarket business, Homeplus Express, and temporarily suspended operations at 37 of its 104 hypermarkets as part of efforts to normalize operations and improve liquidity. Only 67 stores remain in operation.
Private equity firm MBK Partners acquired a 100 percent stake in Homeplus in 2015 from British retailer Tesco Plc for 7.2 trillion won (US$4.9 billion). The retailer, however, became financially strapped due to a slump in the discount store industry and eventually entered court-led rehabilitation proceedings in March last year.
Industry sources said a joint guarantee from MBK Partners is necessary to avoid potential breach-of-trust allegations and persuade shareholders to support additional financing amid uncertainty over the retailer's rehabilitation prospects.
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