Homeplus (a major supermarket chain in South Korea), urgently injected 1 trillion KRW through MBK Partners (a South Korean private equity firm). Can it overcome the major difficulties during the restructuring process?

Carrefour, currently undergoing a corporate revival process, is trying to lay the groundwork for a comeback by urgently raising funds. It is reported that MBK Partners, Carrefour’s major shareholder and private equity firm, recently raised 100 billion Korean won in operational funds, secured by collateral such as MBK Partners Chairman Kim Byung-joo’s residence in Hannam-dong.

This measure was implemented urgently at a critical moment when Carrefour had been in the revival process for nearly a year and the court was about to decide whether to extend the revival period. MBK Partners plans to immediately invest the funds raised to address Carrefour’s liquidity shortage once the revival extension is confirmed.

Faced with declining sales and reduced labor demand, Carrefour is currently implementing voluntary layoffs for employees at the deputy general manager level and above. The company explained that this measure is a necessary step to overcome the liquidity crisis and restore competitiveness.

In December last year, Carrefour submitted a revival plan that included the sale of hypermarkets and loss-making stores, alongside an injection of DIP funds. The plan was supported by an additional budget of 100 billion Korean won each from MBK Partners and another creditor, Meritz, with structural adjustments aided by a policy financial institution, the Industrial Bank of Korea, through loans.

Whether Carrefour can successfully complete its revival process and regain its market position remains highly watched. It is expected that these strategic and financial supports will have a significant impact on Carrefour’s medium- to long-term restructuring and competitiveness enhancement.