This article was published on May 27, 2025, at 2:09 p.m. on the ChosunBiz MoneyMove site.
Curius Partners, which operates private equity funds (PEF) for corporate financial stability, confirmed that all funds for 600 billion won in DIP (Debtor-In-Possession) financing to Homeplus were paid in mid-month. However, since the rehabilitation plan has not yet been submitted to the court, the rehabilitation process has not yet begun.
According to investment banking (IB) industry sources on the 27th, Curius Partners completed the execution of 600 billion won in DIP funding for Homeplus on the 14th. The 600 billion won is expected to be distributed to small businesses by the end of this month.
The Seoul Rehabilitation Court granted approval for DIP financing on the 23rd of last month. DIP financing is a method through which companies undergoing rehabilitation procedures can obtain additional funds. The loan conditions are a 10% annual interest rate with a maturity of three years.
Since it invests in companies that are already undergoing rehabilitation procedures, the risk is high, so Curius Partners' bonds have priority repayment rights. This means they have the right to be repaid before other creditors.
If Homeplus cannot repay the 600 billion won, Chairman Kim Byeong-joo and Vice Chairman Kim Gwang-il of MBK Partners have agreed to repay it instead. They also agreed to immediately fulfill the joint guarantee debt if the rehabilitation process is terminated.
Chairman Kim and Vice Chairman Kim also decided to waive their right of recourse against Homeplus. This means that although the two guarantors can demand repayment from Homeplus should they pay the 600 billion won, they have waived that right. For Homeplus, this effectively reduces its liabilities.
Curius Partners reportedly decided to implement this DIP financing because it is a loan with a public interest characteristic. It was assessed that since the funds will be used to repay debts classified as public interest bonds for small businesses, it aligns with their operational philosophy.
Homeplus's rehabilitation process is viewed as having taken its first step with the completion of the DIP financing payment. However, it is still difficult to say that it is on the right track. Initially, Homeplus planned to submit the investigation report to the Seoul Rehabilitation Court by the 22nd, but the deadline has been postponed again.
The investigation report is the basis for the rehabilitation plan. If the ongoing corporate value of Homeplus (the economic value generated when a business continues its activities) is found to be higher than the liquidation value (the value obtained when disposing of owned assets), the rehabilitation process is likely to be approved. Conversely, if the liquidation value is higher than the ongoing corporate value, bankruptcy would be more favorable.
Homeplus is currently continuing negotiations on rent with its lessors, delaying the submission of the investigation report. If the rent, which is classified as financial debt, decreases, future fixed costs will reduce, improving operating cash flow and increasing ongoing corporate value.