Meritz Financial and MBK Join Forces for Financing... Agree on Over 1 Trillion Won Refinancing Support for Homeplus

Homeplus Financing Lifeline with 3-Year Contract
Stable Business Operation Expected Following Successful Refinancing

Meritz Financial Group has stepped in to support the refinancing of Homeplus's borrowings, amounting to over 1 trillion won.

According to the investment banking (IB) industry on the 22nd, Meritz Financial Group has agreed with MBK Partners to support approximately 1.3 trillion won in borrowings related to Homeplus. This amount includes acquisition financing and other borrowings in the 400 billion won range.

The funding support agreement is reportedly a three-year contract, which is expected to ease Homeplus's cash flow and enable more stable business operations. The refinancing support will be led by Meritz Securities, an affiliate of Meritz Financial Group.

Previously, the private equity fund (PEF) MBK acquired Homeplus in 2015 for 7.2 trillion won, of which 4.3 trillion won was covered by acquisition financing. The remaining acquisition financing borrowings currently stand at around 400 billion won.

The acquisition financing that Meritz Financial Group is supporting for refinancing this time includes borrowings of 300 billion won from Meritz Securities, which are due to mature at the end of June.

Specific refinancing support conditions such as interest rates or collateral have not been disclosed. However, since the convertible redeemable preferred shares and common shares invested by MBK, which are subordinated to Meritz Financial Group's loans, amount to over 3 trillion won, Meritz's risk is expected to be relatively low.

So far, MBK has been reducing the scale of borrowings through methods such as 'store securitization,' where stores are sold and then leased back, but it has faced difficulties in repaying borrowings due to worsening retail conditions, poor performance, and the recent real estate market downturn.

Furthermore, this negotiation draws attention as it marks Meritz Financial Group's move to diversify its business areas into retail and other sectors, moving away from its previously concentrated business structure in real estate project financing (PF).

Meanwhile, this is not the first time Meritz Financial Group has generated profits by providing liquidity support to companies struggling with fundraising.

Earlier last year, Meritz Securities signed an investment agreement worth 1.5 trillion won with Lotte Construction, which was facing a liquidity crisis due to the 'Legoland incident.' This investment involved purchasing PF asset-backed commercial paper (ABCP) guaranteed by Lotte Construction, with Meritz Financial Group affiliates providing senior loans amounting to 900 billion won.

In the same month, Lee Bok-hyun, Governor of the Financial Supervisory Service, drew attention by mentioning this deal as an example while urging the insurance industry at a CEO meeting to play the role of 'institutional investors supplying liquidity.'

This content was produced with the assistance of AI translation services.