Homeplus weighs sale, breakup, or liquidation as restructuring deadline nears

Homeplus, South Korea’s third-largest superstore chain, has entered the sale process as it pursues a merger or acquisition ahead of court approval for its restructuring plan. The company is weighing three main options: a full sale, a split sale of assets and business units, or liquidation. The outcome will largely depend on its real estate value, heavy debt burden, and the emergence of viable buyers.

According to sources in the investment banking and retail industries, Homeplus plans to sign a conditional acquisition deal in July, select top bidders in August and September, and confirm the final preferred bidder by the end of September. Legal proceedings, including submission of the restructuring plan in October and a creditors’ meeting in November, will run in parallel. The sale is being conducted under a stalking-horse bid structure, with Samil PwC as lead advisor.

Graphics by Chung Seo-hee

Court filings estimate the company’s liquidation value at about 3.68 trillion won ($2.7 billion), compared to a going-concern value of roughly 2.51 trillion won. While liquidation may seem more favorable on paper, the company is prioritizing a sale to minimize damage to employment, local economies, and its supply chain. Legal experts note that any acquisition bid must match or exceed the liquidation value under the country’s rehabilitation law.

The market expects the sale price to fall between 1 trillion and 2 trillion won, depending on deal terms, creditor approval, and buyer obligations. Homeplus operates 126 hypermarkets and 308 Express stores nationwide, along with six logistics centers. Of these, 58 locations are company-owned. Its tangible assets are valued at 4.8 trillion won, with land holdings alone worth around 3 trillion won. While the real estate assets are attractive, concerns remain over high fixed costs and aging store maintenance.

Homeplus’s total debt is estimated at 5.5 trillion won, including 3.4 trillion won in lease liabilities and 2 trillion won in bank loans. Another 1.15 trillion won in redeemable convertible preferred shares is also considered de facto debt. Since many stores would need to be leased back after a sale, the scope for financial improvement may be limited. The company posted an operating loss of 314.1 billion won in 2024, its fourth consecutive year in the red, with its capital base significantly eroded.

If no suitable buyer emerges, the company could sell off its real estate and dissolve the business. However, this could lead to large-scale layoffs. As of the end of June, Homeplus employed about 19,280 people directly. Including contract and partner workers, the actual number of affected jobs could be much higher.

People pass by a Homeplus store in Incheon on May 27. /News1

Potential buyers include strategic investors such as Emart, Nonghyup, GS Retail, Coupang, and AliExpress, as well as Chinese capital and private equity firms. Coupang and AliExpress may be especially interested in Homeplus’s store network as a potential logistics infrastructure.

[Choi Hyo-jung]

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