Synopsis
On March 14, Homeplus President Joh Joo-yun publicly apologized for the company's court-led rehabilitation process affecting retailers and investors, assuring them of financial stability and commitment to full debt repayment.Key Takeaways
- Homeplus publicly apologized for its rehabilitation process.
- CEO Joh Joo-yun committed to minimizing inconvenience for stakeholders.
- Company remains financially stable with significant cash reserves.
- Plans to submit recovery strategies to the court by June 3.
- Ongoing investigations into potential irregularities in debt sales.
Seoul, March 14 (NationPress) The president of Homeplus, a leading discount store chain in South Korea, publicly expressed regret on Friday to retailers and investors impacted by the company's court-led rehabilitation process.
"I sincerely apologize to all our partners, store owners, investors, and others facing difficulties due to this rehabilitation process," stated Homeplus President and CEO Joh Joo-yun at a press conference held at the company’s headquarters in western Seoul.
"We are committed to restoring normal operations as quickly as possible to lessen the impact and inconvenience for many individuals."
She emphasized that Homeplus is financially sound, revealing that the company has paid out 340 billion won (approximately US$234 million) in commercial receivables as of Thursday and possesses 160 billion won in cash reserves, according to reports from Yonhap news agency.
The CEO pledged to ensure complete repayment of outstanding debts to mitigate any repercussions arising from the rehabilitation process.
This month, Homeplus proactively entered court-led rehabilitation proceedings following downgrades from two local credit rating agencies, which reduced its corporate bond rating from A3 to A3-, citing insufficient efforts to enhance its financial stability.
Recently, several local firms have halted product supplies to Homeplus due to worries regarding the retailer's ability to settle payment for delivered goods.
Homeplus plans to present its self-recovery strategies to the court by June 3.
Meanwhile, the financial regulatory authority has announced it will investigate potential irregularities in the process surrounding Homeplus' sale of asset-backed short-term debts (ABSTBs).
ABSTBs are short-term bonds that are secured by future receivables as collateral.
On February 25, Homeplus issued ABSTBs valued at 82 billion won through Shinyoung Securities Co.
The issue centers on whether the retailer continued to sell such debts even after being informed of an impending credit rating downgrade.
The Financial Supervisory Service (FSS) has initiated an investigation into financial institutions, including Shinyoung Securities Co., to determine if the securities firm issued bonds while being aware of Homeplus' imminent credit rating reduction.
