Court approves Homeplus' rehabilitation plan

A Seoul court on Wednesday greenlighted a rehabilitation plan for financially strained discount store chain Homeplus Co., following approval from creditors and shareholders during a meeting earlier in the day. The cornerstone of the plan involves reducing Homeplus's operations to concentrate on profitable stores, while promptly selling certain stores to repay creditors primarily.

MBK Partners Vice Chairman Kim Kwang-il explained the strategy. Upon approval, Homeplus will commence repaying its debts as per the rehabilitation plan. The court intends to conclude the rehabilitation proceedings once the company initiates repayments. In March of the previous year, the wholly-owned retailer by private equity firm MBK Partners filed for corporate rehabilitation due to its credit rating decline caused by liquidity issues.

The company subsequently proposed a rehabilitation plan to the bankruptcy court. Homeplus temporarily shut down its outlets starting July 13 due to insufficient operating capital and challenges in sustaining store operations.