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Homeplus Pushes for Asset Revaluation and Change of CRO, Reshaping Strategy

[비즈한국] Homeplus, currently undergoing corporate rehabilitation, appears to be revamping its strategy by pursuing an asset revaluation and replacing its Chief Restructuring Officer (CRO). With the overall sale strategy effectively stalled, industry observers speculate that the company is aiming to recalculate asset values to adjust its future divestment plans.

Realistic Re-estimation of Asset Value, Linked to Express Sale

According to Biz Hankook, Homeplus recently filed a request with the court for approval of an appraisal contract and its associated fees. This is a standard procedure in which companies under rehabilitation must obtain court authorization to have their current asset values determined by a certified appraiser. The appraisal results serve as the foundation for future corporate valuation and the calculation of creditor repayment rates.

Homeplus had previously selected an appraisal firm and signed a contract in March of last year, early in the rehabilitation process. However, it is understood that at that time, the company merely utilized existing appraisal reports from prior asset securitization processes to estimate its corporate value.

Industry insiders believe the new contract was initiated because the property value forecast of 4.7 trillion won presented a year ago failed to gain market confidence, prompting a shift toward a more realistic asset revaluation. In particular, there is speculation that this appraisal may be partially linked to the ongoing sale of the Homeplus Express business unit, as divestment requires a new valuation of the business and its related assets. A Homeplus official stated, "As this is a matter proceeding under court procedures, it is difficult to confirm specific details."

Additionally, it has been confirmed that Homeplus is moving to replace its Chief Restructuring Officer (CRO). At the start of the rehabilitation process, the court adopted the 'Debtor-In-Possession' (DIP) system, allowing existing management to continue running the company without appointing an external administrator. Accordingly, a supervision system involving a CRO and a Creditor Council is currently in place to monitor management and ensure transparency throughout the rehabilitation process.

The CRO is responsible for reviewing various applications for court permission, examining rehabilitation plans, and monitoring fund execution. Homeplus had appointed Kim Chang-young, a former executive at Meritz Capital, as CRO in March of last year. This means a change in leadership is being pursued about a year after the start of the rehabilitation process. Homeplus officials acknowledged that a change in CRO is underway but declined to provide details regarding the nominee or the reasons for the replacement.

Chairman Kim Byung-ju Provides 100 Billion Won Emergency Infusion Collateralized by Personal Assets

The industry is keeping a close eye on the simultaneous revaluation of assets and the replacement of the CRO. Analysts suggest this points to a realignment of future sale strategies, as the plan for an all-inclusive sale has effectively lost momentum. In rehabilitation cases, asset appraisal is often conducted both as a baseline for corporate valuation and as part of a process to review divestment strategies.

The change in CRO is also interpreted as a move to reorganize the restructuring management system. Since the CRO is tasked with overseeing management's financial decisions, the appointment of a new CRO is expected to likely bring changes to the direction of restructuring and management style.

The urgency is further underscored by the fact that only about two months remain until the May 4 deadline for the approval of the rehabilitation plan. Market observers suggest that since a plan must be finalized within this limited window, the strategy may shift toward accelerating the divestment process.

Homeplus is currently facing a critical juncture in its rehabilitation process. The Seoul Rehabilitation Court recently extended the deadline for the approval of the rehabilitation plan by two months, to May 4. While the original deadline was March 4, one year after the rehabilitation began, the schedule was pushed back upon Homeplus's request. Under rehabilitation law, the approval period can be extended for up to six months, leaving room for potential further delays until September of this year.

The emergency capital infusion from MBK Partners appears to have influenced this decision. MBK informed the court that it would provide a total of 100 billion won in DIP financing by the 11th of this month and would waive its right to claim repayment of these funds if the rehabilitation plan were to be aborted. Considering that these funds could be used to resolve urgent liabilities such as wages and payments to subcontractors, the court deemed that extending the approval period would not significantly disadvantage creditors. MBK completed the 100 billion won execution by lending 50 billion won on the 4th and an additional 50 billion won on the 11th.

It is reported that the funds were secured by Chairman Kim Byung-ju of MBK Partners, who borrowed 100 billion won from Woori Financial Group by collateralizing assets including his personal residence in Hannam-dong, and then re-loaned the money to Homeplus. The funds are earmarked for operating expenses, including employee salaries and payments to business partners. A Homeplus representative said, "Employee salaries for February have been paid," adding, "However, it is not yet confirmed whether the March salaries can be paid."