Seoul, March 7 South Korea's state pension fund said on Friday it has recovered about half of its total investment of 612.1 billion won ($423.5 million) in major retailer Homeplus Co., which recently entered a court-led rehabilitation process amid liquidity worries.
The National Pension Service (NPS) originally invested in Homeplus through a fund, including 582.6 billion won in redeemable convertible preferred stock (RCPS), when private equity firm MBK Partners acquired the retail chain in 2015.
RCPS is a hybrid financial instrument that offers investors fixed dividends with the option to convert their holdings into ordinary shares. It also gives the issuing company the right to redeem the shares at a predetermined price or date, reports Yonhap news agency.
The NPS said it has so far recouped 313.1 billion won in RCPS through refinancing and dividends.
"The NPS has not agreed to changes to the terms of RCPS issuance, and the terms remain the same as the time of the initial investment," the NPS said, vowing to do its best to retrieve its remaining investment.
Homeplus entered the rehabilitation process this week after a Seoul court approved the request by MBK Partners, the private equity fund that owns the discount store chain.
The decision came after some local credit rating firms downgraded the company's rating.
Some local companies have suspended or are considering suspending the supply of their goods to retail giant Homeplus, which abruptly filed for a court-led rehabilitation process amid liquidity worries.
Many companies are continuing to supply products to the retailer as there is no clear evidence of an immediate liquidity crisis. However, some suppliers are taking a cautious approach due to concerns that Homeplus would be unable to pay for the delivered goods.
Home appliance giant LG Electronics has suspended shipments of its products to Homeplus, citing rising financial risks. Samsung Electronics is reportedly considering halting its supply to Homeplus.
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