Homeplus Faces Power Cutoffs as Cash Crisis Threatens Stores, Workers and Rescue Sale

Electricity warnings expose a widening cash crisis

Homeplus faces electricity disconnection warnings at six stores from October 27 to 30, 2026, as unpaid utility bills, roughly 100 billion won in outstanding wages and a looming sale deadline put its court approved rescue under fresh pressure. Small businesses inside shuttered supermarkets could lose their remaining trade if entire buildings have to close.

Korea Electric Power Corporation (KEPCO) says its supply terms allow disconnection after electricity bills remain unpaid for at least three months, following a warning after two months. The utility plans to hear tenants' views before deciding whether and when to cut supply. A meeting to discuss the timing is scheduled for October 29.

The immediate warnings cover Pocheon Songu, KINTEX, Goyang Terminal, Namyangju Jinjeop, Paju Unjeong and Gajwa. Incheon Songdo has received a warning for November. Four stores in Busan have also been identified as receiving notices, bringing the reported nationwide total to at least 10.

Homeplus is seeking more time from KEPCO while its sale adviser, Samil PwC, accepts letters of intent through the end of October. Investment materials have gone to about 50 potential investors, yet no clear bidder has emerged.

The crisis has arrived less than two months after the Seoul Bankruptcy Court approved the rehabilitation plan on September 2. Rehabilitation gives a struggling company a chance to keep operating while reorganising its debts. Homeplus now needs enough cash to buy goods, pay workers and maintain buildings while it searches for a buyer.

Which stores face disconnection, and when?

KEPCO's detailed warning schedule runs through October 30, with Gajwa listed for that date rather than the October 29 endpoint initially described. The schedule sets out warning dates; the utility will separately decide the actual timing of any disconnection.

• October 27: Pocheon Songu.
• October 28: KINTEX, Goyang Terminal and Namyangju Jinjeop.
• October 29: Paju Unjeong, with a KEPCO meeting also scheduled to discuss disconnections.
• October 30: Gajwa.
• End of October: Deadline for acquisition letters of intent.
• November: Incheon Songdo faces a disconnection warning.

Busan's Centum City, Busan Banyeo, Yeongdo and Seobusan stores are also covered by warnings. The status of three more locations, Incheon Nonhyeon, Incheon Yeonsu and Incheon Sungui, is being checked.

KEPCO says Homeplus has a separate electricity contract for each store. It has declined to disclose the exact arrears or duration of nonpayment for the six locations, citing customer information. Electricity bills outstanding across the chain have been put at around 10 billion won, although KEPCO has not publicly confirmed that total.

Homeplus encountered similar warnings in July. It then paid one month of overdue charges and secured their withdrawal. The return of the problem about three months later shows how short the company's supply of operating cash remains.

Tenants could lose power despite paying their charges

The six supermarkets in the immediate warning schedule have stopped trading, but independent businesses remain inside some of their buildings. Pocheon Songu and Goyang Terminal suspended supermarket operations on May 10. A hair salon at Goyang Terminal is among the businesses trying to continue.

Accounts of tenant numbers range from two or three at some affected stores to about 10 at others, including Goyang. Nine businesses were still operating at another closed Homeplus location where merchants described receiving a disconnection notice.

Electricity keeps more than lights running. Payment terminals, water pumps and fire safety equipment also depend on it. Homeplus says a cutoff could require the whole building to stop operating under fire safety rules, leaving tenants unable to trade even if they have paid their own charges.

Homeplus has collected tenant sales receipts and deducted management and electricity charges, leaving merchants exposed when the retailer fails to pay the utility. KEPCO plans to advise tenants about individual electricity arrangements.

Kang Ye-seul, a tenant merchant at a closed Homeplus store, described paying bills despite a collapse in business:

Whether it's fees or management costs, despite being in such a tough situation with sales dropping by 80 to 90 percent, I paid everything sincerely and fulfilled my obligations. What have these people actually done…

CEO Jo Ju-yeon told a parliamentary audit that Homeplus currently lacks the money to compensate tenants separately for business losses. The company is waiving restoration charges for departing tenants, but merchants still face difficulties involving leases, deposits and the cost of leaving.

Sales have fallen sharply since the August reopening

Mobile Index estimates that Homeplus received an average of 2.57 billion won a day in credit and debit card payments from October 1 to 24. That compares with 7.56 billion won on August 13, when 67 stores reopened, and 11.68 billion won on the August 15 Liberation Day holiday.

The October average was about 66 percent below reopening day. During October 11 to 24, the daily average fell further to 2.25 billion won, about 70 percent below August 13. A brief lift during the Chuseok shopping season did not sustain the initial recovery.

Only one of the 73 days after reopening produced estimated card payments above 10 billion won: Liberation Day. The pattern leaves Homeplus with much less money flowing in than it had expected when it restarted its core stores.

The rehabilitation plan projects annual revenue of about 4.3 trillion won from 67 stores in fiscal 2030, covering the 2029 to 2030 financial year. That equals roughly 11.8 billion won a day. The plan also forecasts operating profit of 162.8 billion won.

At October's daily average, estimated card payments would total about 938 billion won over 365 days. Card payment estimates exclude cash and other receipts, while the rehabilitation figure is a future target for total revenue. The figures nevertheless show the scale of the recovery Homeplus needs: its projected daily revenue is more than four times October's estimated daily card receipts.

Why emergency funding has not restored full shelves

Homeplus secured 200 billion won in emergency financing before reopening its 67 core stores in August. Such financing, often called DIP financing, provides money to a business during rehabilitation so it can continue operating.

Jo told the National Assembly's Political Affairs Committee on October 12 that the funding had enabled Homeplus to resume business, but the expected return to normal supplier arrangements had not happened. Many suppliers had left after merchandise payments went unpaid.

Homeplus had expected to rebuild stock through trade credit. Under that arrangement, a supplier delivers goods and the retailer pays on an agreed later date, potentially after selling some of the merchandise. Instead, Homeplus has largely had to pay before delivery or use immediate cash payments.

The difference matters at every checkout. When a retailer must pay first, its cash balance limits the goods it can order. A narrower selection gives shoppers fewer reasons to visit, while weaker sales leave less money for the next delivery, wages and electricity.

The operating network has also shrunk from 126 stores before rehabilitation to 67, a reduction of about 47 percent. Around half the workforce has entered paid leave, and roughly 400 employees were estimated to have applied for voluntary retirement in October.

Workers face unpaid wages and pension shortfalls

Ministry of Employment and Labor figures obtained by People Power Party lawmaker Kim Wi-sang put cumulative wage arrears from December 2025 through October 2026 at approximately 455 billion won. About 354.5 billion won had been settled, leaving roughly 100 billion won outstanding.

The unpaid amounts included 19.7 billion won in August wages, 26.7 billion won for September and an estimated 25 billion won for October. Outstanding Chuseok bonuses totalled 16.7 billion won, with another 12.9 billion won in retirement benefits.

Homeplus told employees that 25 percent of unpaid August wages would be paid on October 23 and the remaining 75 percent on October 30, subject to further changes depending on its finances. No payment date was set for the outstanding Chuseok bonuses.

Retirement pension funding presents another problem. Required reserves and contributions totalled 694.59 billion won, against actual payments of 569.18 billion won, leaving a shortfall of 125.41 billion won.

The funding ratio for defined benefit pensions, which promise benefits based on a formula, was 79.9 percent as of February. Defined contribution pensions, under which employers pay into individual retirement accounts, had a contribution ratio of 85.9 percent as of June.

By October 25, the government had advanced 6.088 billion won in unpaid employment entitlements to 940 workers. It had recovered 14 million won, or 0.23 percent. Workers are therefore depending on both the company's rescue and public payment mechanisms to receive money already owed to them.

The rescue plan depends on property and profitable stores

Homeplus's rehabilitation plan combines income from trading with property sales and future borrowing. Among 37 stores designated for closure, it plans to sell 19 properties it owns by February 2028 and use the proceeds to repay debt secured through trusts, including claims held by Meritz.

The company would retain another 38 owned stores, appraised at about 2.8 trillion won. It plans to borrow against those properties in 2030 and again in 2037 to repay remaining debts.

Homeplus also projects annual free cash of 150 billion to 300 billion won. Free cash is money left after operating needs and investment spending that can help meet obligations such as debt repayments.

The difficulty is timing. Property sales and future loans provide a repayment route, but merchandise purchases, electricity bills and payroll require money now. Appraised property values cannot directly pay a current bill until an asset is sold or financing is secured against it.

The 37 planned closures also create obligations beyond shutting supermarket tills. Some buildings still contain tenants, and their basic systems must keep working while businesses remain inside. A store can stop selling groceries while continuing to generate utility and maintenance costs.

A sale process with interest but no clear buyer

Samil PwC has circulated investment memorandums to about 50 domestic and overseas investors, including businesses that might operate the stores and financial investors seeking an investment return. It is accepting letters of intent until the end of October.

A letter of intent indicates that a potential buyer wants to explore a transaction. Homeplus would still need to agree a structure, complete negotiations and secure the approvals and funding required for a sale.

The planned business sale groups the 67 operating supermarkets with headquarters and the online business. The 19 closed properties owned by Homeplus are being marketed separately. Samil PwC is also willing to discuss purchases of selected operating stores, widening the possible arrangements.

A Homeplus official has said a few parties expressed interest, but the company had not confirmed their preferred acquisition structures or whether they would submit letters. The union said it knew of no companies sounding out an acquisition.

Homeplus is preparing leave arrangements for employees at locations that could lose power, including allowing willing staff to use remaining annual leave. Those preparations come as the company must continue paying essential costs before any sale proceeds arrive.

New leadership faces the risk of liquidation

Kim Kwang-il, vice chairman of MBK Partners, resigned as Homeplus CEO and legal administrator on October 26. Jo Ju-yeon will lead the rehabilitation process. Kim's departure followed the cancellation without compensation of MBK's common shares in September, ending its position as the largest shareholder.

Homeplus previously revived rehabilitation in July after raising 200 billion won, even after the court had terminated the process. The company now has an approved plan. If the court determines that it cannot be carried out, it may end rehabilitation and declare bankruptcy.

Hong Hyun-pil, a lawyer with 20 years of experience as a bankruptcy trustee, described what bankruptcy would mean for the company:

If it goes to bankruptcy, Homeplus Co. will follow a liquidation process of selling as much as it owns to repay debt and dissolving the corporation.

Liquidation would shift the task from restoring the retailer to selling its assets and distributing the proceeds to creditors. Hong also said holding MBK legally responsible would be difficult because claims involving intent or gross negligence would require proof.

The immediate decisions come sooner than that possible outcome: KEPCO's October 29 meeting, the planned October 30 wage payment and the acquisition deadline at the end of the month. Together, they will test whether Homeplus can keep essential services running while it seeks the money needed to continue its rescue.

Key Points

• Six Homeplus stores face electricity disconnection warnings dated October 27 to 30; actual cutoffs require a further KEPCO decision.
• Incheon Songdo faces a November warning, and four Busan stores have also received notices.
• Independent tenants could be forced to close if electricity loss shuts entire buildings.
• October 1 to 24 daily card payments averaged 2.57 billion won, about 66 percent below reopening day.
• Outstanding wages total roughly 100 billion won, while retirement pension funding is short by 125.41 billion won.
• Acquisition letters of intent are due at the end of October, with no clear bidder identified.
• The court may end rehabilitation and declare bankruptcy if it determines that the approved plan cannot be carried out.