Ottogi Resumes Supply to Homeplus... Overcame the Hurdle but Still Uncertain

Homeplus Resumes Supply from Some Suppliers
Full Normalization Still Pending, Supply Suspension Impact Continues

Ottogi resumed its supply to Homeplus, which had been temporarily suspended, on the 7th. Homeplus faced a crisis due to supply stoppages from major suppliers following its application for corporate rehabilitation (court receivership), but it has taken a breather after reaching agreements with some suppliers.

According to the distribution industry on the 7th, Ottogi completed negotiations with Homeplus regarding payment and resumed product supply. Previously, major suppliers such as Ottogi, LG Electronics, Lotte Wellfood, Dongseo Food, and Samyang Foods temporarily halted deliveries due to unsettled payments for January sales. In response, Homeplus sent an official letter stating that payments would be made normally starting next week to resolve the situation. A food industry official said, "It is understood that payment negotiations were first completed with suppliers focused on fresh foods," adding, "Discussions are still ongoing with suppliers handling products with longer shelf lives and larger inventories."

However, some companies including LG Electronics, Dongseo Food, Samyang Foods, and Lotte Wellfood still remain in a supply suspension status. These suppliers insist that they can only resume transactions once there is a clear payment plan and guarantee. A food industry official stated, "Negotiations have been somewhat completed with suppliers focused on fresh foods, but discussions are ongoing with companies handling products with longer shelf lives."

Although Homeplus has overcome a major hurdle for now, it is uncertain whether the shortage of goods will be completely resolved. Partner companies, tenants, and subcontractors point out that Homeplus’s fund disbursement plan remains uncertain. Currently, Homeplus has about 1,800 suppliers and 8,000 tenants.

A distribution industry official said, "Homeplus has stated that it will pay suppliers sequentially and will make payments normally on the dates specified in contracts for sales after the corporate rehabilitation commencement date of March 4, but there are still many concerns internally," adding, "Since Homeplus is blocked from raising funds from financial institutions, it seems they will operate using cash generated from sales, which could lead to cash flow shortages."

In particular, small and medium-sized partner companies that heavily depend on Homeplus sales are growing increasingly anxious as delayed payment of supply fees could cause serious financial difficulties. Among the partners, large corporations have some capacity to endure, but small and medium-sized enterprises that rely heavily on Homeplus sales could face existential crises due to financial strain. SMEs with tight cash flow may experience production disruptions if payments are delayed for an extended period. Whether Homeplus can complete smooth negotiations with the remaining suppliers by this weekend is expected to be a turning point in resolving the situation.

Homeplus stated, "The current available cash balance is 309 billion KRW, and the expected net cash inflow for March is 300 billion KRW, securing a total of over 600 billion KRW," emphasizing, "There will be no problems with payments for general commercial claims."

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