South Korea's Homeplus' credit rating plummets after bankruptcy filing

South Korea's major supermarket chain Homeplus has seen its credit rating plummet after it filed for corporate restructuring. The company explained that it filed for restructuring as a preemptive response to risk, but
The rating agency downgraded the rating again due to the start of the rehabilitation procedure. On the 4th, the credit rating agency re-upgraded the credit rating of Homeplus's corporate bills and short-term bonds from "A3-" to "D".
The company explained that this was due to the start of corporate rehabilitation procedures. The company claims that it can continue to operate its distribution business normally even after the rehabilitation procedures have begun, but credit rating agencies have
The credit rating agency Korea Corporate Assessment said, "The initiation of corporate restructuring procedures has impaired financial obligations and timely repayments. All
Financial debts have been frozen, and maturing debts will not be repaid until a rehabilitation plan is finalized.
"We have determined that Homeplus has entered into a state of default due to losses on repayments," it said. Korea Credit Rating Agency also downgraded the company's credit rating. The rating agency said, "Homeplus's corporate promissory notes and short-term
The outstanding balance of corporate bonds is 188 billion won, and the outstanding balance of purchase-only card-based liquidation securities is about 400 billion won. "Financial debt, including corporate bills and short-term bonds, is currently
On the 28th of last month, Korea Credit Rating Agency and Korea Corporate Rating Agency downgraded the company's short-term credit rating from "A3" to "A3".
The company filed for rehabilitation at around 12:03 a.m. on the 4th, citing the increased likelihood of problems arising from financial debt due to the downgrade of its credit rating. The Seoul Rehabilitation Court
Following a hearing on MBK Partners Vice Chairman Kim Kwang-il and Homeplus President Cho Juyeon, the decision was made to begin rehabilitation procedures. MBK Partners is a subsidiary of Homeplus.
Homeplus is a major shareholder of the company. Homeplus claims that this is a "preemptive restructuring." Speaking to reporters shortly after the start of the rehabilitation process, Vice Chairman Kim said, "We are in a state of short-term liquidity due to the sudden downgrade of our credit rating.
"The company is in a normal state and has nothing to do with insolvency or bankruptcy," he said. The Seoul Reorganization Court will implement rehabilitation for the company limited to financial debts.
It was decided that trade liabilities such as transaction fees, payments to franchisees, and employee salaries would be allowed to continue as usual. As for financial liabilities, interest and other expenditures were temporarily suspended.
A rehabilitation plan was to be formulated based on the report of an investigative committee appointed by the court.