Meritz Financial Group is reviewing an emergency operating fund support package worth 100 billion won to help normalise management at Homeplus. It has made guarantees from MBK headquarters and MBK Chairman Kim Byung-joo (김병주) a precondition.

Meritz Financial Group said on June 11 it is considering providing 100 billion won in emergency operating funds, or DIP financing, to help Homeplus normalise management and ensure stable business operations.

Meritz Securities explained it is confirming specific guarantee terms for the financial support requested by lawmakers after meeting Democratic Party lawmakers Yoo Dong-soo, Min Byung-duk, Kim Nam-geun and Lee Kang-il earlier in the afternoon.

Meritz said it needs guarantees from MBK headquarters and Kim given legal constraints, including shareholders' duty of loyalty under the recently revised Commercial Act.

Meritz had initially viewed the 100 billion won support as difficult due to legal constraints such as shareholders' duty of loyalty and a duty of due care. But it is said to believe support within 100 billion won is possible given the credit standing of Kim and MBK, and is checking the guarantee conditions from MBK.

The review of support is a step that takes into account employment stability for Homeplus employees and easing the burden of payments to partner companies. It is a plan to supply liquidity so Homeplus can continue essential business operations while it faces funding difficulties.

The emergency operating funds are provided to keep a company operating during rehabilitation proceedings or a management normalisation process. Collateral and guarantee terms are seen as key variables because interests are generally intertwined between existing creditors and new fund providers.

A Meritz Financial Group official said, "We know that protecting numerous stakeholders, including Homeplus employees and partner companies, is an important role of financial institutions," and added, "We will provide support if there are guarantees from MBK headquarters and Chairman Kim Byung-joo."