Seoul: Homeplus Co., a discount store chain in South Korea, announced Tuesday it has filed for corporate rehabilitation with a Seoul court following a decline in its credit rating amid concerns over liquidity.
According to Yonhap News Agency, Homeplus submitted the request for a court-led rehabilitation program to the Seoul Bankruptcy Court after experiencing a significant drop in its corporate credit rating last month. The move is aimed at addressing potential short-term liquidity challenges.
A Homeplus official stated, "We have decided to file for the rehabilitation program as there existed a possibility of a short-term liquidity crisis. This move is part of our preemptive efforts to avoid a liquidity crisis." The official emphasized that the company's improved debt-to-equity ratio and increased sales in both online and offline stores were not taken into account during last month's credit rating evaluation.
Despite the filing, Homeplus' outlets continue to operate normally across South Korea, ensuring that business activities remain unaffected during the rehabilitation process.