[비즈한국] As Homeplus has filed for rehabilitation procedures, the retail industry's attention is focused on Meritz Financial Group. This is because Meritz Financial Group is Homeplus's largest creditor. Meritz Financial Group holds 62 Homeplus stores nationwide as collateral. Even if Homeplus goes bankrupt, it is expected that there will be no major issues for Meritz Financial Group to recover its loans, given the scale of the real estate. Although Homeplus requested funding from Meritz Financial Group for its rehabilitation, Meritz Financial Group has not shown much of a response.
Meritz Financial Group affiliates, including Meritz Securities, Meritz Fire & Marine Insurance, and Meritz Capital, provided approximately 1.3 trillion won in real estate-backed loans to Homeplus in 2024. As collateral for these loans, 62 Homeplus stores across the country are held.
Homeplus filed for rehabilitation procedures last year, and a decision on whether to approve the rehabilitation plan is expected to be made in May. Struggling with financial difficulties, Homeplus requested DIP (Debtor-in-Possession) financing (emergency operating funds) from its largest shareholder, MBK Partners, its largest creditor, Meritz Financial Group, and the state-run policy financial institution, Korea Development Bank. MBK Partners stated on March 11 that it had "completed direct support for emergency operating funds totaling 100 billion won."
Meritz Financial Group is under no obligation to provide funds to Homeplus. However, public opinion inside and outside Homeplus suggests that they should execute DIP financing on humanitarian grounds, given that they lent money to Homeplus at high interest rates and have already collected massive amounts of interest.
The Joint Committee for Resolving the Homeplus Crisis criticized, "Meritz Financial recovered over 250 billion won through interest, fees, and principal repayment just one year after the loan was executed," adding, "While the stated interest rate was 8% per annum, when adding various fees and financial costs, the actual interest rate reached 11-13%, with some even pointing out that it is essentially akin to loan sharking."
The Joint Committee urged, "Despite reaping such massive profits, they are refusing to participate in the allocation of emergency operating funds, which are absolutely essential for the rehabilitation of Homeplus," and added, "Meritz Financial must stop focusing solely on pursuing profits by exploiting corporate crises and immediately take responsible action for the normalization of Homeplus."
If Homeplus fails to repay its borrowings to Meritz Financial Group, the 62 stores nationwide will be transferred to Meritz Financial Group. In this case, Homeplus would effectively lose its competitiveness. However, even if Meritz Financial Group executes the funding, there is no guarantee of Homeplus's survival. Homeplus has been unable to escape deficits for several years, and there is no guarantee it will turn a profit in the future. Even if it avoids bankruptcy, a decline in competitiveness seems inevitable. For Meritz Financial Group, injecting 100 billion won into an uncertain Homeplus may be burdensome.
Song Young-jin, a lead researcher at NICE Investors Service, predicted, "All foreseeable scenarios—such as a reduction in operating stores following the approval of the rehabilitation plan, the success of an M&A with a new acquirer, or liquidation proceedings following the rejection of the rehabilitation plan—are highly likely to result in the weakening of the market position of Homeplus, the second-largest operator in the hypermarket industry," and added, "Accordingly, a structural change in the competitive landscape of the hypermarket market, currently centered on the three companies of E-Mart139480, Homeplus, and Lotte Mart, seems inevitable."
The issue is that even political circles are subtly pressuring Meritz Financial Group to provide funding to Homeplus. Meritz Securities applied for a license for the issuance of corporate notes (eum) to financial authorities last year. It is a situation where it would not be good to sour relations with the political circle. Min Byung-duk, Chairman of the Euljiro Committee of the Democratic Party of Korea, said, "Meritz Financial provided over 1 trillion won in loans to Homeplus and recovered a whopping 250 billion won in interest and fees in just one year," and added, "We strongly urge Meritz Financial (to provide funding)." Meritz Financial Group has not issued an official position regarding Homeplus.