Latest news with #HomePlus
Miami Herald
9 hours ago
- Business
- Miami Herald
Analysis: Business model of Asia's top private equity fund questioned
SEOUL, June 20 (UPI) -- Michael Byungju Kim, who worked at Goldman Sachs and the Carlyle Group, founded MBK Partners in 2005. Over the next two decades, he built it into one of Asia's leading private equity funds through aggressive mergers and acquisitions. It now manages up to $30 billion in assets. However, Chairman Kim and MBK face challenges, because of its major investments in Home Plus, South Korea's No. 2 discount chain, and Lotte Card, the country's fifth-largest card issuer. This prompts experts to question the business model of the buyout fund. Late last week, MBK vowed to write off its entire stake in Home Plus to facilitate the company's corporate rehabilitation process. The firm stated that "All $1.8 billion worth of common shares held by MBK in Home Plus will be canceled without compensation." This means that MBK is ready to walk away from the Home Plus investment empty-handed, although it poured billions of dollars to take over the supermarket chain. In 2015, MBK acquired Home Plus from Tesco in a $5.1 billion deal financed through a combination of equity and debt. But the rise of e-commerce and the impact of the COVID-19 pandemic severely undermined its performance. Since 2021, Home Plus has reported losses for four consecutive years, and its debt-to-equity ratio surged to nearly 500% this year. It filed for corporate rehabilitation in March, and MBK eventually decided to relinquish all management rights and claims while receiving nothing in return. Yet, MBK is under pressure to do more, as the National Assembly Speaker Woo Won-shik noted during his visit to a Home Plus outlet in Seoul on Wednesday. He accused MBK of showing an irresponsible stance. "The livelihoods of some 100,000 people, who are directly and indirectly employed by Home Plus, are now at risk. The damage is already severe," Woo wrote on social media. "Even after initiating rehabilitation procedures, MBK failed to assume responsibility, instead shifting the burden to workers and merchants through delayed payments, asset sales, and store closures," he added. Woo hinted at potential legislative action, including a parliamentary hearing and new regulations targeting private equity funds. Lotte Card up for grabs There are other crucial tasks for MBK and its Chairman Kim, particularly regarding Lotte Card. In 2019, MBK partnered with Woori Bank to channel $1 billion for a 79.8% interest on Lotte Card. MBK holds 59.8% and Woori has the remaining 20%. MBK tried to sell its stake in Lotte Card in 2023, but failed. The fund strives to divest its stake once again by reportedly sending teaser letters to multiple potential bidders, including Hana Financial Group, last month. UBS is managing the sales, with preliminary bids expected to open as early as mid-July. It remains to be seen whether MBK will be able to dispose of Lotte Card this time. But the sale price is predicted to go down due to the recent setbacks of the company. Lotte Card's net profit for 2024 more than halved to $100 million compared to $269 million in 2023. During the first quarter of 2025, it netted $10 million in profit, down 42.4% from a year before. Two years ago, MBK reportedly hoped to secure at least $2.2 billion for its stake, but the price is feared to decrease substantially now, which may significantly reduce MBK's potential profit. "MBK's business model has been very successful over the past 20 years as shown by the fact that its founder Kim has become the wealthiest man in the country," Seoul-based consultancy Leaders Index CEO Park Ju-gun told UPI. "But, its business model is now being put to the test. The company would have to worry about its damaged reputation and growing political momentum for regulating private equity funds," he added. In the 2025 Forbes billionaire list, Kim was second to none among South Koreans with $9.5 billion in wealth, surpassing $8.2 billion of Samsung Electronics Chairman Lee Jae-yong. Park expected that the country's unicameral parliament might introduce an act curbing highly leveraged buyouts and banning private equity funds from directly managing companies after acquisition. Seo Yong-gu, a professor of business administration at Sookmyung Women's University, echoed the concerns, although he opposed excessive regulations. "MBK has played a key role in developing Korea's capital market. But buyout funds have often been criticized for seeking short-term gains at the cost of long-term growth for a fast exit. We may need a reform," he said in a phone interview. "Highly leveraged acquisitions are also problematic. Still, I am against the idea of prohibiting private equity funds from managing their portfolio firms. It would fundamentally deny the very essence of the business," he said. Copyright 2025 UPI News Corporation. All Rights Reserved.
UPI
10 hours ago
- Business
- UPI
Analysis: Business model of Asia's top private equity fund questioned
Kim Yeong-hee works at a Homeplus Geumcheon branch. Late last week, MBK vowed to write off its entire stake in Home Plus to facilitate the company's corporate rehabilitation photo by Jeon Heoo-Kyun/EPA-EFE SEOUL, June 20 (UPI) -- Michael Byungju Kim, who worked at Goldman Sachs and the Carlyle Group, founded MBK Partners in 2005. Over the next two decades, he built it into one of Asia's leading private equity funds through aggressive mergers and acquisitions. It now manages up to $30 billion in assets. However, Chairman Kim and MBK face challenges, because of its major investments in Home Plus, South Korea's No. 2 discount chain, and Lotte Card, the country's fifth-largest card issuer. This prompts experts to question the business model of the buyout fund. Late last week, MBK vowed to write off its entire stake in Home Plus to facilitate the company's corporate rehabilitation process. The firm stated that "All $1.8 billion worth of common shares held by MBK in Home Plus will be canceled without compensation." This means that MBK is ready to walk away from the Home Plus investment empty-handed, although it poured billions of dollars to take over the supermarket chain. In 2015, MBK acquired Home Plus from Tesco in a $5.1 billion deal financed through a combination of equity and debt. But the rise of e-commerce and the impact of the COVID-19 pandemic severely undermined its performance. Since 2021, Home Plus has reported losses for four consecutive years, and its debt-to-equity ratio surged to nearly 500% this year. It filed for corporate rehabilitation in March, and MBK eventually decided to relinquish all management rights and claims while receiving nothing in return. Yet, MBK is under pressure to do more, as the National Assembly Speaker Woo Won-shik noted during his visit to a Home Plus outlet in Seoul on Wednesday. He accused MBK of showing an irresponsible stance. "The livelihoods of some 100,000 people, who are directly and indirectly employed by Home Plus, are now at risk. The damage is already severe," Woo wrote on social media. "Even after initiating rehabilitation procedures, MBK failed to assume responsibility, instead shifting the burden to workers and merchants through delayed payments, asset sales, and store closures," he added. Woo hinted at potential legislative action, including a parliamentary hearing and new regulations targeting private equity funds. Lotte Card up for grabs There are other crucial tasks for MBK and its Chairman Kim, particularly regarding Lotte Card. In 2019, MBK partnered with Woori Bank to channel $1 billion for a 79.8% interest on Lotte Card. MBK holds 59.8% and Woori has the remaining 20%. MBK tried to sell its stake in Lotte Card in 2023, but failed. The fund strives to divest its stake once again by reportedly sending teaser letters to multiple potential bidders, including Hana Financial Group, last month. UBS is managing the sales, with preliminary bids expected to open as early as mid-July. It remains to be seen whether MBK will be able to dispose of Lotte Card this time. But the sale price is predicted to go down due to the recent setbacks of the company. Lotte Card's net profit for 2024 more than halved to $100 million compared to $269 million in 2023. During the first quarter of 2025, it netted $10 million in profit, down 42.4% from a year before. Two years ago, MBK reportedly hoped to secure at least $2.2 billion for its stake, but the price is feared to decrease substantially now, which may significantly reduce MBK's potential profit. "MBK's business model has been very successful over the past 20 years as shown by the fact that its founder Kim has become the wealthiest man in the country," Seoul-based consultancy Leaders Index CEO Park Ju-gun told UPI. "But, its business model is now being put to the test. The company would have to worry about its damaged reputation and growing political momentum for regulating private equity funds," he added. In the 2025 Forbes billionaire list, Kim was second to none among South Koreans with $9.5 billion in wealth, surpassing $8.2 billion of Samsung Electronics Chairman Lee Jae-yong. Park expected that the country's unicameral parliament might introduce an act curbing highly leveraged buyouts and banning private equity funds from directly managing companies after acquisition. Seo Yong-gu, a professor of business administration at Sookmyung Women's University, echoed the concerns, although he opposed excessive regulations. "MBK has played a key role in developing Korea's capital market. But buyout funds have often been criticized for seeking short-term gains at the cost of long-term growth for a fast exit. We may need a reform," he said in a phone interview. "Highly leveraged acquisitions are also problematic. Still, I am against the idea of prohibiting private equity funds from managing their portfolio firms. It would fundamentally deny the very essence of the business," he said.
Miami Herald
19-05-2025
- Business
- Miami Herald
Top Asian private equity fund chief hit with foreign travel ban: reports
SEOUL, May 19 (UPI) -- South Korean prosecutors have reportedly banned MBK Partners Chairman Michael Byungju Kim from leaving the country as part of an investigation into the so-called Home Plus bond scandal. MBK is one of Asia's top private equity funds, and Home Plus is South Korea's No. 2 discount chain. Multiple local media outlets reported Monday that the Seoul Central District Prosecutors' Office requested the U.S. Ministry of Justice to impose a foreign travel ban on Kim and obtained approval. He is a U.S. citizen. The measure follows an earlier move by the prosecution Saturday when Kim returned to Seoul from London. Authorities executed a search and seizure warrant upon his arrival in Korea, confiscating his mobile phone and other digital devices as evidence, according to reports. Observers expect that Kim will be summoned along with his close aides for formal questioning in the near future. "In South Korea, the seizure of mobile phones and a travel ban typically means that a summons is imminent. Kim is highly likely to meet prosecutors face-to-face soon," business tracker Leaders Index CEO Park Ju-gun told UPI. "If top executives of Home Plus or MBK Partners decided to issue bonds while having prior knowledge of a credit cut, they might be in legal trouble," he added. The ongoing probe centers around allegations that executives from Home Plus and its parent firm MBK issued a large volume of bonds Feb. 25 while already aware of an impending downgrade in Home Plus's credit rating, which occurred Feb. 28. Issuing bonds while knowing a credit downgrade could constitute fraud against investors. Home Plus has denied the allegations, but the Financial Supervisory Service countered that the financial regulator secured concrete evidence to the contrary. In addition to the prosecution's investigation, the FSS announced last March that it would look into MBK. The results of that inquiry are also expected in the near future. MBK acquired Home Plus in 2015 from Tesco for $5.1 billion. However, the chain, which runs hundreds of stores across the country, has suffered losses since 2021 due to the impact on business of COVID-19 and rising competition from online retailers. Comments from MBK were not available. Copyright 2025 UPI News Corporation. All Rights Reserved.
Yahoo
26-04-2025
- Business
- Yahoo
Santa Fe Place mall plans to add sporting goods store by end of year
Santa Fe Place mall is getting a major new tenant, as Dunham's Sports, a large Michigan-based sporting goods company, is expected to open by the end of the year. Mall General Manager Antonio Chavez said the retailer will be moving into the space formerly occupied by Conn's HomePlus, as well as an adjoining space. The two spaces combined will provide Dunham's Sports with nearly 60,000 square feet of space, making it one of the largest mall tenants. 'We're very excited to have Dunham's Sports in Santa Fe,' Chavez said, adding the retailer will give residents another reason to shop locally instead of driving to Albuquerque. 'It's good competition, and it helps the mall to keep growing." According to its website, Dunham's Sports operates more than 250 stores in 25 states and bills itself as the largest sporting goods chain in the Midwest. The company's online store locator does not list any other locations in New Mexico. Attempts to reach company officials were unsuccessful. Dunham's Sports offers a full line of sporting goods as well as apparel, outdoors equipment, electronics, bedding and footwear. It also offers a large selection of firearms. While Santa Fe has lost a handful of national retailers in recent months — including Big Lots, Party City and Joann, as each of those companies downsized significantly or ceased operations — Dunham's Sports will be the second such business the city has attracted in that time. Daiso, a Japanese value retailer that operates 6,000 stores worldwide and 150 in the U.S., opened in the Plaza Santa Fe shopping center on Zafarano Drive in January.
Yahoo
14-03-2025
- Business
- Yahoo
Thinking of switching to Verizon's 5G home internet? It's now a little less tempting
Verizon has increased the discount price of its 5G Home Plus internet service without actually raising its base price, making the offer less enticing for some new customers looking to switch internet service providers. According to a post on Reddit (via Android Authority), the major cellular carrier reduced the discount price of its 5G Home Plus internet plan from $35 to $25. This means that new customers will have to pay $55 a month if they switch to Verizon. That's a $10 increase from the $45 monthly rate that pre-existing customers are paying for the Home Plus plan. However, the regular price of Verizon's 5G Home Plus remains the same at $80 a month. The one thing that makes the new discount price worth it for new customers is that they get a free subscription perk of their choice via Verizon billing, as a couple of commenters have pointed out. This means new customers can choose between Netflix and Max bundle, Apple Music, or the Disney+ bundle. Each subscription service is about a $10 value. The discount change comes one month after Verizon outlined an $8 increase on Mobile Protect plans for customers using four lines or more, meaning they will pay $68 a month for their phone insurance instead of $60. That price change goes into effect on March 27. A $10 increase in discount price of Verizon's 5G Home Plus internet service may not seem like much on the surface, especially because of the free subscription perk that comes with it, but in reality it decreases the value of the service. It devalues it even more when the company charges more for it without saying so in the first place.
