In a sharp reversal from its earlier stance, Homeplus pledged on March 17 to fully repay debts tied to its asset-backed securities (ABSTB) as part of its court-led rehabilitation process. The statement comes just a week after the company distanced itself from the sale of ABSTB and commercial paper (CP), marking a significant policy shift.
The turnaround follows mounting pressure from creditors, regulators, and lawmakers, which has forced MBK Partners, the private equity firm that owns Homeplus, to respond. Critics accuse MBK of attempting to offload financial risks while public sentiment increasingly frames the situation as a case of “take the money and run.”
MBK initially blamed credit rating agencies for Homeplus’ financial troubles after the retailer applied for court receivership on March 4, triggering a credit downgrade. As suppliers halted deliveries and small business partners raised concerns over unpaid invoices, Homeplus sought to reassure stakeholders, stating that supply disruptions would soon stabilize and trade-related debts were being repaid sequentially.
South Korea’s National Tax Service launched a tax probe into MBK on March 11, while lawmakers have been meeting with affected investors and suppliers. Facing intensifying criticism, Homeplus executives held their first press conference on March 14 to apologize for the crisis, followed by two consecutive days of public statements.
On March 16, MBK announced that chairman Michael ByungJu Kim would provide financial support to expedite payments to struggling small business suppliers. A day later, Homeplus ran a full-page newspaper ad with the headline: “Homeplus Rehabilitation Process—We Will Fulfill Our Social Responsibility as a Shareholder.” The company also walked back its earlier stance, acknowledging that it holds the final responsibility for repaying ABSTB and CP investors, rather than brokerage firms alone.
“The Homeplus crisis has become a national issue, dealing a major blow to MBK’s reputation,” said a private equity industry official. “If its rehabilitation process falters, MBK’s future business operations could face significant hurdles. Their recent moves suggest an effort to contain the fallout.”
Doubts remain over MBK’s financial support pledge. Some industry insiders note that private equity firms often structure agreements that allow them to recoup personal contributions from investor funds.
“Private equity firms like MBK typically include clauses in their agreements that allow general partners (GPs) to recover personal financial sacrifices from fund investors,” said a fund manager at another private equity firm. “While Michael ByungJu Kim publicly committed to financial support, it remains unclear whether he intends to seek reimbursement through investor capital.”
Homeplus has yet to disclose the exact amount required to settle small business claims, stating only that it is working with MBK to complete payments as quickly as possible.
Meanwhile, concerns are growing that MBK continued issuing asset-backed securities despite being aware of Homeplus’ worsening liquidity crisis, potentially exacerbating investor losses. According to data from Democratic Party lawmaker Lee In-young’s office, Homeplus-issued securities through Shinyoung Securities totaled 360.8 billion won ($271 million) between November 2024 and January 2025, a 35% increase from the same period a year earlier. Last month alone, Homeplus issued 151.8 billion won worth of securities, the highest monthly total since 2023.
On Feb. 25, the company received a preliminary credit rating downgrade notice from credit agencies—but still proceeded to issue 82 billion won in securities that same day. Financial regulators are now investigating Shinyoung Securities, as well as two rating agencies—Korea Investors Service and Korea Ratings—over their handling of Homeplus’ credit evaluations.
