Homeplus takes emergency loan from Meritz, tied to Express unit sale
What's the deal? South Korean retailer Homeplus has secured a bridge loan of approximately 1 billion Korean won from Meritz Financial Group to cover emergency operating costs. The ultra-short-term loan — set for two to three months at a 6% annual interest rate — must be repaid immediately once Homeplus receives proceeds from the sale of its Homeplus Express convenience store division.
Meritz demanded personal joint guarantees from major shareholder MBK PartnersDealroom has a profile for this one. Try Dealroom → and the Homeplus executive team as conditions for the loan. Homeplus countered by proposing a pledge on real estate subordinate beneficial interest as collateral instead.
A Homeplus official said the business transfer contract for Express has already been signed and the transaction is expected to close by the end of June, meaning the loan's actual usage period would be roughly one month.
Why now? Homeplus is in the middle of a rehabilitation process and facing urgent cash-flow problems — including wage arrears and unpaid supplier payments. Without resolving these issues, the company said, its restructuring efforts face "serious difficulties."
Meritz already holds 68 Homeplus stores as collateral. Proceeds from major real estate sales completed or ongoing since the rehabilitation began are also prioritised for Meritz debt repayment, giving the financial group significant leverage over Homeplus's future.
What could go wrong? The deal's structure creates a tight chain of dependencies. If the Express sale is delayed past June or falls through entirely, Homeplus would struggle to repay even this short-term loan — potentially deepening its financial crisis. The retailer's reliance on a single asset sale to fund basic operations like payroll signals just how thin its margins for error have become.
Meritz's growing hold over Homeplus assets also raises questions about how much room the retailer has to manoeuvre during rehabilitation.
The signal: MBK Partners, the private equity fund that controls Homeplus, typically operates as a buy-and-build investor across Asia — but here its role has been reduced to that of a potential personal guarantor on a one-month bridge loan. That shift speaks volumes about how deeply distressed the Homeplus situation has become and how limited the options are for private equity sponsors once a portfolio company enters court-supervised rehabilitation.
Read more: chosun.com
