Meritz Financial: "Homeplus Collateral Value Alone is 5 Trillion Won... No Issues with Fund Recovery"
Meritz Financial Group (Meritz Financial Holdings) stated on the 4th that the commencement of corporate rehabilitation proceedings by Homeplus does not pose a significant problem in recovering the funds it lent.
In a statement released that day, Meritz Financial said, "Although we hold secured claims against Homeplus amounting to 1.2 trillion KRW, the collateral value of the trust company is evaluated at 5 trillion KRW, so there should be no issues in recovering the funds."
The three Meritz Financial companies (Meritz Securities, Meritz Fire & Marine Insurance, and Meritz Capital) executed senior loans of approximately 1.2 trillion KRW to Homeplus in May last year. Homeplus provided trust beneficiary certificates from a trust contract with a real estate trust company as collateral to Meritz Financial Group. Currently, Homeplus's real estate and tangible assets are managed as trust property.
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On the same day, Homeplus filed for the commencement of corporate rehabilitation proceedings at the Seoul Bankruptcy Court. Typically, when a company enters rehabilitation proceedings, all claims and debts are frozen. However, according to Meritz Group, assets entrusted under the trust contract are not considered assets of the company applying for rehabilitation and are therefore unrelated to the rehabilitation process. This means that even if Homeplus fails to repay the loan, the trust property such as real estate and tangible assets can be securitized and used as collateral for repayment. A Meritz Financial official stated, "All of Homeplus's real estate is provided as collateral in the trust, and Meritz Financial holds the first-priority beneficiary rights," adding, "Exercising the beneficiary rights is unrelated to Homeplus's corporate rehabilitation proceedings, and the right to dispose of the collateral arises immediately upon the occurrence of an Event of Default (EOD)."
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