[비즈한국] Homeplus has entered into a corporate rehabilitation process. While Homeplus explains that it applied for rehabilitation as a preemptive measure against a potential decline in credit ratings, employees are finding it hard to accept the move when the company currently faces no immediate operational disruptions. Some point out that this might be a way to create a pretext for large-scale restructuring.
Entering Rehabilitation Sparks Widespread Internal Employment Anxiety
Homeplus filed for the commencement of corporate rehabilitation at the Seoul Rehabilitation Court on the morning of the 4th. The application was filed around 12:03 AM, and the court issued a commencement order around 11:00 AM. Homeplus stated, "We applied for corporate rehabilitation to preemptively respond to potential financial issues caused by a credit rating downgrade, and the court granted a prompt commencement order." On February 28, Korea Ratings downgraded the credit ratings of Homeplus's commercial paper and short-term bonds from A3 to A3-. Korea Investors Service also lowered its credit rating for the company.
Homeplus announced that while the repayment of financial debt will be suspended once the rehabilitation process begins, debts to partner companies and general commercial debts will be repaid in full, and employee salaries will be paid as usual. All Homeplus channels, including hypermarkets, Express stores, and online services, will continue to operate normally.
However, the news of the rehabilitation process has unsettled consumers. An employee at a Homeplus branch visited on the 4th said, "Many customers asked today if Homeplus is going out of business. I had to explain that the stores are operating normally without any impact." On the 5th, anxiety deepened as companies like CGV, Shilla Duty Free, and CJ Foodville suspended the use of Homeplus gift certificates.
Homeplus informed its employees of the rehabilitation process through an internal notice on the 4th. The staff appeared bewildered by the unexpected situation. One employee said, "Buyers were busy all day negotiating with suppliers. Since payments were effectively put on hold for about a month, they had a difficult time discussing the matter with the partners."
Job insecurity is also spreading among the staff. Homeplus claimed they filed for rehabilitation as a precautionary measure, even though no issues such as failure to pay for goods had occurred. Internally, this is being viewed as an overreaction, with suspicions growing that it is merely a pretext for restructuring.
A Homeplus headquarters employee, Mr. A, said, "Over 100 billion won in cash comes in every month. We aren't failing to pay off promissory notes, and cash is continuously circulating, so I wonder why they had to file for corporate rehabilitation. Even on Blind (an anonymous community for office workers), many employees are questioning the company’s decision for that reason."
Another employee, Mr. B, explained, "When we recently offered voluntary retirement to employees at stores in the Busan, Ulsan, and Gyeongnam regions, the company paid about 18 months' worth of average monthly salary as a severance package. Since then, there was growing expectation among staff that the company would offer even better terms. Rumors were spreading, asking, 'Wouldn't we be able to get severance terms similar to E-mart?' However, the atmosphere changed completely after the rehabilitation process began. Stories are circulating that they will start with forced resignations rather than favorable voluntary retirement packages."
Employee C added, "Last year, the issue of mass layoffs by MBK Partners was raised during the national audit. With MBK now feeling pressured regarding restructuring, it seems like they are creating a pretext where the court, not MBK, will be the one laying off employees. It seems like even if they conduct aggressive restructuring because the company is in a 'difficult situation,' the Ministry of Employment and Labor won't be able to intervene easily. Employees are worried that restructuring, which used to be done cautiously, will now be carried out openly."
A Homeplus official explained, "The court also determined that while there are no immediate problems, there is a possibility that issues could arise around May or June. We responded because of these future risks. We are communicating internally that (the commencement of the rehabilitation process) is a procedural response to financial debt and is unrelated to human resources restructuring."
Failure to Sell Homeplus Express: Did MBK’s Sense of Crisis Deepen?
The labor union is also expressing concerns about workforce reductions. A Homeplus union official stated, "Anxiety is growing because the company is providing no information to the workers. We sent an official letter to the management on the morning of the 4th requesting a response by 5 PM, but we have received nothing. If they enter the rehabilitation process, they will inevitably push for staff cuts and restructuring, which would make on-site operations impossible. We are already in a situation where we cannot afford to lose any more people."
The official pointed out, "About 10% of the total staff leave the company every year due to retirement. Stores in regions where voluntary retirements recently took place are in chaos due to understaffing. Although the company and MBK Partners' Vice Chairman Kim Gwang-il advertise that they have hired more people than other hypermarkets over the last 3-4 years, the number of retirees is so high that they have no choice but to keep hiring to operate the stores."
Industry experts interpret Homeplus's decision to undergo corporate rehabilitation as a fallout from the failed sale of its Express division. Homeplus began a process to sell its corporate supermarket brand, "Homeplus Express," separately in June last year, but failed to find a buyer. The expected sale price for Homeplus Express had been estimated at 700 billion to 800 billion won.
An industry source mentioned, "They expected that the funds from the Express sale would sustain them for a few years and naturally become the momentum for the next M&A, but the sale failed. While the company is not facing immediate collapse, it seems that MBK feels a significant sense of crisis following the failure to sell the Express division."