The court has decided to extend the financial status investigation of Homeplus, which is undergoing rehabilitation procedures, by one more month. This decision comes as the company argues that it needs more time to determine which is better: continuing operations or closing down and selling assets to pay off debts.
According to the legal community on the 22nd, the Seoul Rehabilitation Court extended the deadline for submitting Homeplus's investigation report from the original May 22 to June 12.
The investigation report will include a comprehensive analysis of the company's financial situation and business plans. The key elements are the ongoing corporate value and the liquidation value. The investigation committee, Samil, will calculate and write in the report the economic value generated when continuing corporate activities (ongoing corporate value) and the value obtained when ceasing corporate activities and disposing of retained assets (liquidation value).
Earlier, on the 20th, Homeplus submitted an application for an extension of the investigation report submission period to the court. Homeplus spends about 400 billion won annually on rental fees and aims to reduce operational expenses through negotiations with store landlords regarding rental fee adjustments. If rental fees decrease, the ongoing corporate value could relatively increase compared to the current status.
MBK Partners, the largest shareholder of Homeplus, has gained additional time to conduct rental fee adjustment negotiations with store landlords due to this court decision. Recently, Homeplus had notified landlords of 17 buildings of contract termination while negotiating rental fee adjustments with landlords of the 61 stores currently in operation. Going forward, MBK Partners will resume negotiations with landlords to further reduce rental fees.
The court has also extended the deadline for submitting the rehabilitation plan from June 12 to July 10. The rehabilitation plan will include restructuring scenarios such as asset sales and the corresponding repayment plans.
The deadline for the approval of the rehabilitation plan for Homeplus under the Debtor Rehabilitation Act is set for March 4 next year.