The conflict between Meritz Financial Group and MBK Partners over the future of Homeplus is escalating as the struggling retailer seeks emergency operating funds to sustain its corporate rehabilitation process. At the center of the dispute is a proposed short term bridge loan that Homeplus says is essential to maintaining operations, while Meritz insists additional safeguards are necessary before any new funding can be approved.
According to investment banking industry sources, Meritz recently informed Homeplus that it could consider providing an ultra short term operating loan worth around 100 billion won for a period of two to three months. However, the lender reportedly demanded joint and several personal guarantees from MBK Partners executives and Homeplus management as a condition for the financing. The demand has triggered a public standoff between the retailer, its private equity owner, and its largest creditor.
Homeplus sharply criticized the conditions attached to the proposed financing, arguing that Meritz already possesses substantial protection through existing collateral arrangements. The company stated that Meritz currently holds collateral over 68 Homeplus stores tied to approximately 1.2 trillion won in loans and also maintains priority rights over proceeds from ongoing asset sales during the rehabilitation process. Homeplus claimed that the value of those assets, including the planned sale of its Express division and subordinate real estate collateral, is more than sufficient to secure the requested emergency funding.
The retailer argued that demanding additional personal guarantees from MBK executives effectively undermines the purpose of emergency financing for a company undergoing rehabilitation. Homeplus also emphasized that MBK Partners and management have already committed significant personal resources to keep the company afloat. According to the company, roughly 300 billion won in private contributions and guarantees have already been provided, while MBK Chairman Kim Byung-joo previously used his own residence as collateral to secure another 100 billion won emergency loan earlier this year.
Homeplus warned that without timely access to operating funds, maintaining the rehabilitation process itself could become increasingly difficult. The company stated that asset sales are one of the few realistic tools available for rehabilitating firms to secure liquidity, but a large portion of the proceeds are already earmarked for debt repayment, limiting the retailer’s ability to fund daily operations. Company officials argued that creditors should support efforts to stabilize Homeplus rather than push the business closer toward insolvency.
Meritz, however, maintains that additional guarantees are necessary given the uncertainty surrounding Homeplus’ recovery prospects. The financial group reportedly expressed concerns that extending further loans without performance guarantees from MBK Partners could expose the company to criticism or even allegations of breach of trust, particularly from shareholders. From Meritz’s perspective, creditors are expected to prioritize the preservation of principal rather than absorb risks similar to those taken by equity investors.
The dispute has also fueled wider criticism of MBK Partners and its stewardship of Homeplus since acquiring the retailer. Critics argue that MBK generated significant proceeds through aggressive asset sales while failing to establish a sustainable long term recovery plan for the business. Democratic Party lawmaker Min Byung-duk stated that MBK secured approximately 4.1 trillion won between 2016 and 2024 through the sale of 28 stores and logistics warehouses, but said efforts to normalize Homeplus operations were insufficient.
The latest dispute comes as the Seoul Bankruptcy Court recently extended the deadline for approval of Homeplus’ rehabilitation plan, underscoring the fragile state of the retailer’s restructuring efforts. Industry observers say the ability to secure additional operating funds in the coming weeks could determine whether the rehabilitation process can continue successfully or whether Homeplus faces a deeper financial crisis.