[비즈한국] Michael Kim, Chairman of MBK Partners (MBK), is drawing attention for sending an encouraging message to students of the MBK Scholarship Foundation. Chairman Kim has faced various criticisms this year, primarily that MBK is failing to fulfill its responsibilities as the largest shareholder while Homeplus undergoes corporate rehabilitation procedures. Amidst this, the fact that Chairman Kim—who seems to have refrained from issuing official statements regarding Homeplus—has sent a message of encouragement to scholarship students is stirring up backlash.
Chairman Michael Kim's out-of-the-blue encouragement
Chairman Michael Kim, who serves as the chairman of the MBK Scholarship Foundation, sent a message to the foundation's scholarship recipients on July 30. Chairman Kim stated, "Since its founding in 2005, MBK has consistently approached all matters, including Homeplus, with 'virtue'," and added, "MBK's affairs are my own, as I serve as both the chairman of the foundation and the founder of the firm. I hope this situation does not affect the pride, self-esteem, and hope held by the MBK Scholarship Foundation or its students."
Chairman Michael Kim added, "The MBK Scholarship Foundation is not merely about someone's support; it is a foundation for all of us, woven tightly with stories of hope for a future community and trust in one another that we have built together," continuing, "Just as it has for the past 18 years, the MBK Scholarship Foundation will remain here to support and cheer for your growth."
There was nothing particularly special about the content of Chairman Michael Kim’s message. It is true that he has shown affection for the MBK Scholarship Foundation. According to public disclosures by the National Tax Service for public interest corporations, Chairman Kim contributed 1.5 billion KRW at the time of the foundation's establishment and an additional 200 million KRW last year. However, this message is being met with reactions that it is somewhat out of the blue. This is because Chairman Kim has rarely issued public messages to students, and it has already been five months since Homeplus filed for corporate rehabilitation.
Chairman Michael Kim has not issued any significant statement to the employees of Homeplus. Instead, MBK has appeared preoccupied with self-defense. In an explanatory document on the 7th, MBK stated that Homeplus' poor performance is a structural crisis faced by the entire offline retail industry. This was a rebuttal to points raised at a Homeplus corporate rehabilitation discussion hosted by the Democratic Party of Korea's Euljiro Committee on August 1. During the discussion, excessive borrowing and asset sales were cited as causes for Homeplus' managerial deterioration. In response, MBK emphasized, "The Homeplus management crisis is due to structural industrial changes," and added, "There were no dividends paid, and we focused on investing over 1 trillion KRW in facilities and strengthening online capabilities."
So, what is the possibility of Homeplus surviving?
MBK is currently pursuing the sale of Homeplus. In July, Homeplus stated, "It is possible to immediately secure management control of Homeplus through new capital injection without the burden of acquiring existing equity," and claimed, "Acquisition has become possible by valuing Homeplus at 3.7 trillion KRW, which is the liquidation value in the investigation report."
According to Homeplus, its total assets are approximately 6.85 trillion KRW, with liabilities of about 2.9 trillion KRW, leaving net assets at the 4 trillion KRW level. The company explains that if it borrows 2 trillion KRW by using its 4.8 trillion KRW worth of real estate as collateral, the actual capital required for a Homeplus acquisition could be less than 1 trillion KRW. Despite Homeplus' explanation, not a single party has publicly expressed an intention to acquire it. There is also significant criticism that Homeplus' sell-off approach is being compared to real estate "gap investment."
The problem arises if Homeplus ultimately fails to be sold. The situation is not very comfortable for MBK. Homeplus must have its rehabilitation plan approved by the court by March 4 of next year. If it fails to sell Homeplus by then, the rehabilitation process will be terminated. Samil PwC valued Homeplus’ liquidation value at 3.6816 trillion KRW and its going-concern value at 2.5059 trillion KRW. As the liquidation value is higher, there is a possibility that the company will enter liquidation proceedings if a solution is not found by March 4 of next year.
It is not that Chairman Michael Kim has completely stepped away. According to MBK, the Chairman contributed 100 billion KRW of his own money to Homeplus. However, it is generally assessed that 100 billion KRW is far from sufficient for the normalization of Homeplus. Moreover, a significant portion of that 100 billion KRW is reportedly in the form of loan guarantees rather than direct capital injection.
If Homeplus is liquidated, the reputation of Chairman Michael Kim will inevitably plummet. Both the ruling party and the labor sector are criticizing him with one voice. The securities industry is also not ruling out the possibility of Homeplus' liquidation. Oh Rin-ah, an analyst at LS Securities, stated, "As Homeplus’ liquidation value is calculated to be higher than its going-concern value, an independent rehabilitation plan has become meaningless," adding, "There is a possibility of liquidation if no buyer is found."
Homeplus announced that it would implement measures such as sequentially closing 15 stores where negotiations for rent adjustments have made no progress, implementing an unpaid leave system for headquarters employees, and having executives return a portion of their salaries—which has been in effect since March 2025—in order to ease financial pressure and build a foundation for rehabilitation until an M&A is achieved. Consequently, 15 stores, including Siheung, Gayang, Ilsan, Gyesan, Ansan Gojan, Suwon Woncheon, Hwaseong Dongtan, Cheonan Sinbang, Munhwa, Jeonju Wansan, Dongchon, Jangnim, Busan Gamman, Ulsan Buk-gu, and Ulsan Nam-gu branches, are slated for closure.
Homeplus stated, "The dedication of our employees and the unwavering support of our customers have made our rehabilitation efforts possible so far," and added, "We will continue to reward our customers' trust by providing the best products and services, and we will absolutely protect the precious livelihoods of our employees by succeeding in this rehabilitation."
Within Homeplus, there is strong opposition to the store closures. While Chairman Michael Kim sent a message of encouragement to MBK Scholarship Foundation students, he shows no signs of wanting to negotiate with Homeplus employees. The Homeplus branch of the Mart Industry Workers' Union criticized the closure of the 15 stores, saying, "On the surface, it looks like a measure to resolve the liquidity crisis, but it is clearly a declaration of abandoning a full-scale sale and is a preliminary step toward split sales and liquidation," adding, "This whole flow clearly shows MBK's plan to tear Homeplus apart and make a 'hit-and-run' exit."