Homeplus, currently undergoing corporate rehabilitation procedures, is now able to find a new owner. This follows a court decision to approve its application for a merger and acquisition (M&A) prior to the approval of its rehabilitation plan, based on an assessment that disposing of Homeplus's assets would be more beneficial than continuing its operations.
On the 20th, the Seoul Bankruptcy Court announced its approval of Homeplus's application for an M&A prior to the approval of its rehabilitation plan and the selection of Samil PwC as the lead manager for the sale. This comes 108 days after Homeplus filed for corporate rehabilitation on March 4.
Pre-rehabilitation plan M&A refers to pursuing an M&A before the court approves the rehabilitation plan. This method is typically used when the liquidation value is higher than the value of continuing the business as a going concern, or when rapid normalization is required.
According to the court, Homeplus's going concern value was estimated at 2.5059 trillion won, approximately 1.2 trillion won less than its liquidation value of 3.6816 trillion won. This indicates that selling off assets is considered more valuable than Homeplus continuing its operations. Typically, courts consider a high probability of rehabilitation when the going concern value is higher than the liquidation value.
With the court's approval today, Homeplus can now formally begin the process of finding a new owner to acquire the company. The Seoul Bankruptcy Court stated, "We expect the final selection of an acquirer to take approximately two to three months." Homeplus must complete the M&A before the deadline for the approval of the rehabilitation plan, which is March 4 of next year.
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