Seoul, March 14 (IANS) The president of Homeplus, a major discount store chain in South Korea, offered a public apology on Friday to retailers and investors affected by the company’s court-led rehabilitation process.
“I would like to sincerely apologise to all of our partners, store owners, investors and others who are experiencing inconvenience due to this rehabilitation process,” Homeplus President and Chief Executive Officer (CEO) Joh Joo-yun said during a press conference at the company’s headquarters in western Seoul.
“We will do our best to normalise the company as soon as possible to minimise the damage and inconvenience to many people.”
She stressed that Homeplus remains financially stable, saying that the company had paid 340 billion won (US$234 million) in commercial receivables as of Thursday and holds 160 billion won in cash, reports Yonhap news agency.
The CEO vowed to make a full payment of remaining debt to avoid any damage involving the rehabilitation process.
Earlier this month, Homeplus “preemptively” entered court-led rehabilitation proceedings after two local credit rating agencies lowered the rating of its corporate bonds to A3- from A3, citing the retailer’s lack of efforts to improve its financial health.
Over the past week, some local companies have suspended supplying products to Homeplus out of concerns that the retailer may not pay for the delivered goods.
Homeplus said it will submit its self-help plans to the court by June 3.
Meanwhile, the financial regulator said it will look into whether there were any flaws in the process of Homeplus selling its asset-backed short-term debts (ABSTBs).
ABSTBs are short-term bonds backed by future receivables as collateral.
On February 25, Homeplus issued ABSTBs worth 82 billion won through Shinyoung Securities Co.
The controversy boils down to whether the retailer had sold such debts even after it was notified that its credit rating would likely be lowered.
The Financial Supervisory Service (FSS) said earlier it has launched an inspection into financial institutions, including Shinyoung Securities Co., focusing on whether the securities firm had issued the bonds while already aware of Homeplus’ imminent credit rating downgrade.
—IANS
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