[비즈한국] With the failed public sale, the sense of crisis surrounding Homeplus is intensifying. While various options such as seeking a new acquirer, government intervention, and rumors of a Nonghyup acquisition are being discussed, critics point out that none of them are realistic. As the financial crunch worsens, there is growing sentiment within the industry that the company must urgently explore realistic alternatives, such as a piecemeal sale rather than a total package sale.
Amid financial distress and exit compensation costs… Risks of worsening cash flow increase
Homeplus, standing on the edge of a cliff, is facing heightened anxiety as its financial troubles compound. Recently, Homeplus sent an official notice to tenant companies informing them of a delay in settlement payments. Although the original payment date was December 1, the company decided to postpone it, judging that it would be difficult to pay on time. A Homeplus official explained, "We have not stopped payments, and they are scheduled to be made soon," adding, "It is difficult to confirm an exact payment schedule as the situation varies by store."
Industry observers note that Homeplus’s financial situation is deteriorating rapidly. This is the first time since filing for corporate rehabilitation that the company has failed to meet payment deadlines to tenants due to a lack of funds. Homeplus currently uses cash generated from store sales to pay suppliers and cover labor costs; however, as sales continue to decline, its capacity to manage cash flow is increasingly shrinking.
A union representative stated, "While employee wages for this month were paid normally, concerns are spreading internally that paying December salaries will be difficult due to the payment delay to tenants," adding, "With significant tax arrears, the company is barely surviving on government guarantees and the like."
In fact, the amount of various overdue taxes, including comprehensive real estate tax, value-added tax, local taxes, and property tax, totals approximately 70 billion won. It is reported that the company cannot even pay basic utility bills, such as electricity and health insurance premiums, on time.
Critics point out that cash flow is especially likely to worsen further. The movement of tenants leaving the stores is becoming full-scale, which could lead to an even sharper drop in sales. According to Bizhankook’s reporting, it has been confirmed that Homeplus recently applied to the court for permission to "pay exit compensation." This is a procedure to provide compensation to tenants who have chosen to vacate their store locations.
A Homeplus official explained, "15 stores were scheduled to close due to failed rent negotiations, but we have put the closure plan on hold," adding, "However, some store owners requested contract terminations or exits, and we applied for court permission to prepare compensation plans for them."
With clear signs of tenants leaving, concerns in the industry are mounting. This is because when tenants pull out, store vacancies increase, creating a vicious cycle that leads to a decline in customer traffic and reduced sales. An industry official remarked, "As Homeplus has more tenant companies than most large retailers, the impact (of tenant departures) on sales will be significant," adding, "In particular, if empty spaces become noticeably common, consumers will interpret Homeplus’s management status negatively, which could further accelerate customer departures."
Deadline of the 29th approaches… Experts mention possibility of piecemeal sale
Homeplus’s normalization process hit another snag after the recent failure of the final acquisition bid. In the final bidding process that ended on November 26, even companies that had previously submitted letters of intent failed to submit formal proposals, causing the sale process to fall through. The court plans to discuss the future course of action by collecting opinions from Homeplus, the lead manager Samil PricewaterhouseCoopers, the creditor council, and interested parties before the December 29 deadline for submitting a rehabilitation plan. Industry analysts believe that Homeplus, having failed its first sale, will now enter a second round of bidding.
However, the prevailing view is that finding a suitable acquirer within the remaining month will not be easy. Homeplus had been pursuing a "stalking horse" pre-packaged M&A since June without success, and failed to secure an acquirer even after switching to a public competitive bidding process in October. Skeptics argue that it is practically impossible to find a candidate in one month that could not be found in nearly half a year.
With no clear alternatives, rumors of a Nonghyup acquisition have resurfaced. Because Nonghyup, which operates Hanaro Mart, has the capital and distribution network, it is often mentioned as a strong candidate. However, the industry believes the possibility of Nonghyup acquiring Homeplus in the current situation is extremely low.
Kang Ho-dong, Chairman of the National Agricultural Cooperative Federation (Nonghyup), clarified his position against an acquisition during a parliamentary audit in October, stating, "I understand the difficulties Homeplus is facing, but Nonghyup also has no capacity to spare," and "Both Nonghyup Distribution and Hanaro Distribution are posting annual losses of 40 billion won and have already undergone restructuring of over 200 employees." A retail industry official also noted, "As Nonghyup has already stated several times that it has no intention to acquire, this possibility is effectively closed."
While the union is strongly urging direct government intervention, experts point out that this is also realistically difficult. Lee Jong-woo, a professor of business administration at Ajou University, said, "Similar cases like the TMON-WeMakePrice (TMAP) incident have occurred recently, and Homeplus is not the only company undergoing rehabilitation," adding, "Under these conditions, it is realistically difficult for the government to selectively support only a specific company." Seo Yong-gu, a professor at Sookmyung Women's University’s School of Business, also pointed out, "It is more desirable for things to proceed according to market logic rather than government intervention," and "Even if the government intervened at this stage, it is not a situation that can be solved just like that."
Industry experts are focusing on the possibility of a piecemeal sale in the future. Analysis suggests that there may be room for negotiation if the company sells off specific business units, such as Homeplus Express, which it previously tried to sell, or selects and sells only the most profitable stores. Professor Lee Jong-woo predicted, "If they sell off some stores in the metropolitan area individually, there will be retail companies interested," adding, "A full-package sale is virtually difficult at this stage, so a piecemeal sale looks the most likely." He added, "If MBK Partners wants to stick to a full sale, it must inject additional capital to hang on; otherwise, it will have no choice but to opt for a piecemeal sale due to the cash crunch."
A Homeplus official stated, "As proposals can be submitted until December 29, we will do our best to push forward with the M&A," and added, "We have not heard anything regarding a piecemeal sale."