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From left: Kim Kwang-il, vice chairman of MBK Partners; Kim Joong-hyun, CEO of Meritz Fire & Marine Insurance; and Cho Ju-yeon, CEO of Homeplus, attend the MBK Partners-Meritz Executives Meeting for Homeplus Rehabilitation, hosted by the Democratic Party of Korea’s Euljiro Committee at the National Assembly Members' Office Building on July 9. / Photo by Reporter Lee Byung-hwa

Homeplus at crossroads: Will political mediation find a breakthrough?

Political circles have brought MBK Partners and Meritz Financial Group to the negotiating table as the threat of liquidation looms over Homeplus. Unless a concrete financing plan is put together by July 20—the deadline for filing an immediate appeal—the hypermarket chain faces inevitable bankruptcy. Attention is now focused on whether MBK and Meritz can narrow their differences over providing emergency operational funding.

The Democratic Party of Korea’s Euljiro Committee hosted a closed-door meeting titled the "MBK Partners-Meritz Executives Meeting for Homeplus Rehabilitation" on the morning of July 9. The meeting brought together Kim Kwang-il, vice chairman of MBK Partners; Kim Joong-hyun, CEO of Meritz Fire & Marine Insurance; and Cho Ju-yeon, CEO of Homeplus.

"With the termination of Homeplus's rehabilitation proceedings, everyone involved is now standing on the edge of a cliff," Representative Min Byung-dug of the Democratic Party said in his opening remarks. "If a solution is not found by July 20, the livelihoods of around 100,000 people—including subcontractors, tenant vendors, 13,000 employees, and local commercial districts that rely on Homeplus—could completely collapse."

He added, "The supply scale from domestic farms delivering produce to Homeplus alone amounts to 1.9 trillion won. Emergency operational funds are desperately needed to put out the immediate fire."

Homeplus is highly likely to enter formal liquidation proceedings if it fails to secure the 200 billion won in additional working capital requested by the court before the July 20 deadline.

"While 200 billion won is by no means a small sum, it is an amount both MBK and Meritz can reasonably bear when considering the profits they have earned through Homeplus so far and the devastating loss of social trust they would face otherwise," Representative Min stressed. "I hope today's meeting serves as a venue to find a joint solution rather than passing the buck to one another."

Despite the pressure, MBK and Meritz remain deadlocked over the funding terms. Meritz maintains that MBK, as the majority shareholder, must provide full guarantees for the fresh capital, while MBK stands firm on capping its guarantee limit at 100 billion won.

Industry observers expect it will be difficult to find common ground, given the deep divide over the financing structure and the scope of guarantees. Although the meeting was held behind closed doors, Representative Min was reportedly heard shouting inside the room, harshly criticizing the MBK executive.

"I sincerely apologize for the immense pain so many people are enduring because of the Homeplus situation," Kim Kwang-il, vice chairman of MBK Partners, said upon entering. "Since this venue has been arranged, I will listen closely to all perspectives."

Appearing with a tense expression, Kim Joong-hyun, CEO of Meritz Fire & Marine Insurance, stated, "I hope that practical solutions can be hammered out here today."

Cho Ju-yeon, CEO of Homeplus, made an emotional plea, saying, "There are more than 10,000 employees alongside our partner companies' staff working at Homeplus. Please do not forget about them."

                                                                                                        Lee Seon-young