Homeplus, filed for rehabilitation proceedings

Homeplus announced today that it has filed for corporate rehabilitation proceedings with the Seoul Recovery Court this morning. A Homeplus official explained, "The credit rating was downgraded because many improvements, such as increased online and offline sales and improved debt ratios, reflected in the credit evaluation disclosed last month, were not fully incorporated." They continued, "Since the credit rating has been lowered, there is a possibility of issues arising in terms of short-term funding, so we applied for rehabilitation proceedings today to alleviate the burden of short-term repayment. We emphasize that this application for rehabilitation is a preventive measure." Regardless of the filing for rehabilitation, the company stated that all channels, including large supermarkets, express stores, and online operations, will continue to operate normally. Homeplus explained that once the rehabilitation process begins, repayment of financial bonds will be deferred, but trade debts with partners and general commercial debts will be fully repaid according to the rehabilitation process, and employee salaries will be paid normally. Homeplus expects that with the deferment of financial bonds and other financial obligations due to the rehabilitation decision, cash flow will improve. Due to the nature of the retail industry, where most sales are cash transactions, it is known that about 100 billion won in surplus cash will flow in over one or two months. Homeplus stated that excluding lease liabilities accrued for remaining lease periods, the actual financial debt, including operating funds loans, is approximately 2 trillion won. The company's real estate assets amount to 4.7 trillion won, and therefore, Homeplus expects that once the rehabilitation plan is finalized, negotiations with financial creditors will not be difficult. A Homeplus official said, "Despite the triangular challenges of unreasonable regulations on large supermarkets that have persisted for over ten years, the shift to online purchasing channels due to the COVID-19 pandemic, and the rapid growth of e-commerce companies like Coupang and C-C commerce, we have achieved three consecutive years of sales growth and are focused on improving operational performance." They added, "Although we applied for rehabilitation inevitably to prevent potential funding issues that could arise from the downgrade of our credit rating, we will overcome this wisely with the combined efforts of employees, labor unions, and shareholders."

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Breaking news came out.. I was surprised, thinking Homeplus was going bankrupt.

Still, they compete fiercely with Emart in discounting.

It hurts my heart more and more as supermarkets disappear..