SEOUL, March 04 (AJP) - Homeplus, one of South Korea’s leading retail chains, filed for a court-supervised debt rehabilitation program on Tuesday, citing concerns over short-term liquidity following a recent credit rating downgrade.
The company submitted its application to the Seoul Bankruptcy Court in what it described as a “preemptive” measure to stabilize its financial standing.
A Homeplus spokesperson said that despite growth in both online and offline sales, a recent credit evaluation failed to adequately reflect improvements in the company’s financial health, including a reduced debt ratio. As a result, its credit rating was downgraded.
“The downgrade raises the possibility of short-term liquidity issues,” the spokesperson said. “To alleviate the burden of immediate debt repayments, we decided to file for rehabilitation.”
Homeplus emphasized that all business operations — including its large-format supermarkets, Homeplus Express stores, and e-commerce platform — would continue without disruption.
Under the court-supervised restructuring, repayments on financial debt will be temporarily suspended. However, obligations to suppliers and other business partners will be honored in full, the company said. Employee salaries will also be paid as usual.
Executives expressed confidence that the process would ease financial pressures and improve cash flow.
Homeplus estimates its actual financial debt, excluding lease liabilities, at approximately 2 trillion won (about $1.5 billion). The company also holds real estate assets valued at 4.7 trillion won ($3.5 billion), a factor it believes will facilitate negotiations with creditors.
The retailer has faced mounting challenges in recent years. It has struggled against regulatory restrictions on large retail chains, a consumer shift toward online shopping accelerated by the pandemic, and the rapid expansion of e-commerce giants such as Coupang.
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