Homeplus, a major South Korean retailer, filed for court receivership on March 4, dealing a financial setback to its owner, private equity firm MBK Partners, which has struggled for years to offload the business.
MBK acquired Homeplus from Britain’s Tesco in 2015 for 7.2 trillion won ($5.4 billion), funding the deal with 2.2 trillion won in blind fund investments and 5 trillion won in acquisition financing, including debt under Homeplus’s name. However, mounting interest payments and weak profitability weighed on the business, which struggled to compete as e-commerce sales surged during the COVID-19 pandemic.
MBK has made repeated attempts to sell Homeplus, but efforts have stalled. In June 2024, it sought to sell Homeplus Express, the more profitable supermarket division, but has yet to find a buyer. At one point, market speculation linked Chinese e-commerce giant AliExpress to a potential takeover, though no deal materialized.
The bankruptcy filing could also impact MBK’s ongoing battle for control of Korea Zinc, the world’s largest non-ferrous smelter. MBK has been working with Korea Zinc’s top shareholder, Young Poong Group, since September 2024 to challenge Chairman Choi Yun-beom’s leadership, citing governance concerns. Choi’s camp has pushed back, arguing that MBK, as a private equity firm, is focused on short-term gains rather than long-term management. The Homeplus collapse may strengthen Choi’s position.
MBK said it would cooperate with the court process and emphasized that the bankruptcy does not reflect the retailer’s underlying fundamentals.
“The court has determined that Homeplus’s fundamentals remain intact, and we will actively support the rehabilitation process,” MBK said in a statement.
