Kim Byung-ju (김병주), chairman of MBK Partners, and MBK Partners have decided to provide a joint and several guarantee for the full amount of 200 billion won in emergency operating funds, or DIP financing, needed for Homeplus' rehabilitation.

MBK Partners said Chairman Kim and the company decided to provide a full joint and several guarantee for Homeplus' 200 billion won DIP financing.

Meritz has not yet completed its loan approval process. MBK Partners said it will provide a direct joint and several guarantee for the full amount of the loan if Meritz makes a final decision to approve the 200 billion won emergency operating funds loan.

MBK Partners explained that Homeplus needs to secure 200 billion won in operating funds to avoid the risk of bankruptcy and continue its rehabilitation process.

DIP financing is a loan that provides new operating funds to a company undergoing rehabilitation proceedings. Homeplus plans to secure the funds to continue operations and reduce damage to partners, suppliers and other parties.

Chairman Kim and MBK Partners said they provided financial support worth about 400 billion won through contributions of personal funds, cash support and joint and several guarantees before and after the start of the rehabilitation process.

If the additional 200 billion won joint and several guarantee is provided, the total amount of financial support borne by Chairman Kim and MBK Partners will rise to 600 billion won.

MBK Partners stressed that if rehabilitation proceedings continue, Homeplus can pursue management normalisation while maintaining its value as a going concern.

It said it could also leave open the possibility of mergers and acquisitions through attracting new investors.

MBK Partners said the decision was made to minimise damage to stakeholders including the company, employees, partners, suppliers and tenant companies through Homeplus' rehabilitation. It said it will provide a full joint and several guarantee if Meritz makes a final decision to approve the loan.