Homeplus Chief Executive Cho Joo-yeon said a merger or acquisition must take place for the retailer to return to normal operations, arguing that an outside takeover is unavoidable because the company's room to raise sales is limited.
Appearing before the National Assembly's Political Affairs Committee at a parliamentary audit on the 12th, Cho said: "We were able to resume operations through 200 billion won ($140 million) in debtor-in-possession financing for a company under rehabilitation, but what we had originally hoped for was a normalization of supply deliveries." Cho added, "The plan was to increase inventory and increase sales through credit transactions."
"But the reality is that only prepayment and cash transactions are possible," Cho said. "The situation is extremely limited in terms of growing sales." Cho added: "Ultimately, the Homeplus situation can only be resolved if an M&A goes through. I feel deeply sorry about this."
Homeplus secured 200 billion won in debtor-in-possession financing in July, giving it a footing to continue its court-led rehabilitation. The company has nonetheless been struggling with unpaid payments to suppliers. According to the retail industry, Homeplus posted only about 30% of its sales target in early October.