Homeplus dismisses liquidity concerns after rollover of debts

Homeplus Co., a discount store chain in South Korea, on Tuesday dismissed concerns about its possible liquidity problems following a recent rollover of its debt owed to a local brokerage by June. Homeplus was scheduled to pay 300 billion won (US$220 million) worth of debt to Meritz Securities Co. by the end of December but demanded the 6-month rollover, which was accepted by the securities firm, a company spokesperson said. The rollover sparked concerns on whether Homeplus could pay back another loan worth 500 billion won extended by local financial institutions with its maturity due in October. "We (Homeplus) have (tentatively) agreed with Meritz and the (unidentified) financial institutions on the rollover of the loans valued at a combined 800 billion won," the spokesperson said without elaborating. In 2015, private equity fund MBK Partners acquired an entire 100 percent stake in Homeplus for 7.2 trillion won, including 4.3 trillion won in loans, from British retailer Tesco Plc. Out of the 4.3 trillio n-won loan, the company reportedly has paid back nearly 4 trillion won. Homeplus currently operates 131 stores nationwide as of February, down from more than 140 in 2015. In the fiscal year that ended in February 2022, the company posted an operating loss of 260.2 billion won, narrowing from 133.5 billion won a year ago. In February last year, Korea Investors Service lowered the credit rating of Homeplus' corporate bonds to A3 from A3+ due to the continued operating losses and lack of competitiveness compared to its bigger rivals, such as E-Mart Inc. Homeplus faces its credit evaluation by the local credit rating firm this week. Source: Yonhap News Agency