Homeplus, which is facing possible bankruptcy after a decision to scrap its rehabilitation procedure, has been drawn into another conflict over how to use proceeds from the sale of stores that have closed. Homeplus wants to use the money as emergency operating funds, but its largest creditor, Meritz Financial Group, is known to be seeking debt recovery.

Political and financial investment circles said on July 9 that Homeplus is pursuing a sales contract worth about 170 billion won for 2 closed stores.

Kim Nam-geun (김남근), a lawmaker on the Democratic Party’s Euljiro Committee, said after a meeting titled “MBK Partners and Meritz executives meeting for Homeplus rehabilitation” that 19 of the closed stores are owned by Homeplus. He said buyers have emerged for 3 of them and sales contracts worth about 170 billion won have been signed for 2.

Kim said Homeplus asked Meritz to allow part of the proceeds to be used as emergency operating funds, but Meritz’s position is that the proceeds should be used to recover debt.

Meritz was also known to have explained that the deals are conditional purchase agreements and final sales contracts have not yet been signed.

A key issue in Homeplus’ rehabilitation is securing emergency operating funds. The Democratic Party urged its largest shareholder, MBK Partners, and its largest creditor, Meritz, to arrange funding to increase the likelihood of rehabilitation.

Min Byung-duk (민병덕), head of the Euljiro Committee, said about 100 billion won in emergency operating funds is needed. He called on Meritz and MBK executives to fulfill the social responsibility they should bear as creditors and investors.

Meritz previously deposited 100 billion won in conditional emergency operating funds, or debtor-in-possession financing, into escrow. But a blame game between MBK and Meritz over the conditions for disbursing the funds has continued, leaving it unclear whether the money will actually be injected.

Kim claimed that because the 100 billion won is in escrow, it could be disbursed by the 20th if MBK Chairman Kim Byung-ju provides a personal guarantee, but both sides have attached many conditions, making it effectively difficult.

The Democratic Party also said it is willing to push for a hearing over the Homeplus situation. Kim said, “We will definitely hold a Homeplus hearing,” and added, “We will clearly determine whether MBK and Meritz intentionally tried to drive it toward liquidation.”

The National Pension Service’s investment in MBK funds has also come under scrutiny. The Democratic Party argued that because the pension fund has committed a significant amount of capital to private equity funds managed by MBK, it should review whether it is appropriate to maintain MBK’s status as a commissioned manager.

Min said the National Pension Service has committed about 2.5 trillion won to 11 private equity funds run by MBK and that while some has been recovered, he understands a substantial amount remains under management. He said calls continue for a comprehensive review of issues including recovering existing investments and whether it is appropriate to maintain MBK’s status as a commissioned manager.