MBK Partners and Chairman Kim Byung-joo on the 16th agreed to guarantee 2 billion KRW in emergency funds for Homeplus, ending a standoff with creditor Meritz Financial Group. The guarantee resolved disagreements over financial support as Homeplus faced potential bankruptcy. Meritz Financial Group's board approved the debtor-in-possession financing the same day, conditional on the joint guarantee.
MBK Partners and Kim Byung-joo Provide Full Joint Guarantee for 2 Billion KRW
MBK Partners issued a statement on the 16th announcing that Chairman Kim Byung-joo and MBK Partners decided to provide full joint guarantee for 2 billion KRW in emergency operating funds needed for Homeplus restructuring. MBK noted that while some reports suggested the emergency operating fund loan was already confirmed, Meritz's board resolution process remained pending at that time.
Political figures called for a forward-looking decision from Meritz Financial Group's board. Han Byung-do, acting representative and floor leader of the Democratic Party of Korea, stated at a policy coordination meeting held at the National Assembly on the 16th that Homeplus was expected to secure emergency operating funds and expressed expectations for a forward-looking decision from Meritz's board. Han had previously instructed Park Sang-hyuk, a ruling party secretary of the National Assembly's Political Affairs Committee, to pursue a hearing related to the Homeplus situation.
Meritz Financial Group Board Approves DIP Support
Meritz Financial Group held a board meeting on the 16th and granted final approval for 2 billion KRW in DIP support conditional on joint guarantee from Chairman Kim Byung-joo and MBK. Meritz Financial stated that the additional 1 billion KRW support was a difficult decision made after careful consideration as a financial company prioritizing shareholder value enhancement, and expressed hope that this essential funding support would serve as a catalyst for restructuring.
DIP refers to emergency operating funds that companies in restructuring proceedings secure to continue operations. MBK has provided financial support totaling approximately 4 billion KRW through private contributions, cash support, and joint guarantees before and after Homeplus entered restructuring proceedings. Including this joint guarantee, the total support reaches 6 billion KRW.
MBK Partners stated that if restructuring proceedings continue, Homeplus can maintain its value as a going concern and pursue business normalization, and the path to successful M&A through attracting new investors will open, which holds significant meaning for all stakeholders including Homeplus, executives and employees, partner companies, and creditors.
Homeplus to File Immediate Appeal on the 20th
Homeplus plans to file an immediate appeal with the Seoul Rehabilitation Court on the 20th based on the agreement to continue restructuring proceedings. Once the rehabilitation court's approval, procedures necessary for DIP execution, and consent to the restructuring plan from major creditors are completed, the emergency operating funds will be disbursed.
Homeplus will pursue the sale of remaining business units (headquarters, large-scale stores, online) after completing structural innovation work. Large-scale stores that entered temporary closure from the 13th will establish a schedule to resume operations through consultation with partner companies once the court accepts the immediate appeal and decides to extend restructuring proceedings.
TPG Conducts Due Diligence on Lotte Rental Stake
Global private equity fund operator Texas Pacific Group (TPG) recently began exclusive due diligence to acquire the 61.18% stake in Lotte Rental held by Hotel Lotte and Busan Lotte Hotel, according to the investment banking industry on the 18th. Securities industry observers suggest that TPG's acquisition pursuit could lead to strengthened business competitiveness and corporate value reassessment for Lotte Rental.
Park Kang-ho, a researcher at Daishin Securities, stated that market interest in Lotte Rental has increased following TPG's acquisition pursuit, and investors at a recent corporate briefing positively evaluated TPG's acquisition pursuit, differentiated future mobility business expansion potential, stable profit generation capacity, and undervaluation attractiveness.
TPG does not directly operate rental car business in Korea, resulting in relatively lower concerns about monopoly from combined market share compared to Affinity. Lotte Rental disclosed on the 1st that it had discussions including due diligence with TPG regarding stake sale, but nothing was confirmed regarding the company's stock sale. The company plans to re-disclose related information by the end of this month.
Stick Investment Wins National Growth Fund Scale-up League Selection
The Korea Development Bank and Korea Growth Finance Investment Management announced on the 13th the final selection of seven sub-fund consignment operators for this year's second National Growth Fund (indirect investment sector) policy fund. Stick Investment was selected for the 500 billion KRW Scale-up League, which selects only one consignment operator.
The National Growth Fund Scale-up League has a target fund formation amount of 500 billion KRW but unlike other leagues has no fund formation upper limit, resulting in high participation intention from large houses. J&N Private Equity (J&N PE), which challenged the Scale-up League, presented strong buyout performance as a weapon despite relatively short operating history, including successful IPO of eco-friendly ship materials company Hyundai HIMS with internal rate of return exceeding four times investment principal, and demonstrated fund recovery capability in advanced manufacturing and materials/parts/equipment sectors through stake sale of secondary battery equipment company Daebo Magnetic.
The Korea Development Bank selected Stick Investment, which prominently featured large-scale blind fund management experience with massive assets under management. Stick Investment adopted a strategy to secure policy fund trust through verified fund liquidation records and stability of internal control systems in capital markets. Analysis suggests this strategy of emphasizing organizational capability to stably lead large-scale deals in future reviews proved effective.
FAQ
What did MBK Partners agree to on the 16th?
MBK Partners and Chairman Kim Byung-joo agreed on the 16th to provide full joint guarantee for 2 billion KRW in emergency operating funds for Homeplus restructuring.
When will Homeplus file its appeal with the court?
Homeplus plans to file an immediate appeal with the Seoul Rehabilitation Court on the 20th to continue restructuring proceedings.
What is the total financial support MBK has provided to Homeplus?
Including the recent joint guarantee, MBK's total support to Homeplus reaches 6 billion KRW through private contributions, cash support, and joint guarantees before and after restructuring proceedings.
