MBK Partners faces serious trouble after losing billions on bad investments. The private equity firm must give up its entire stake in Home Plus without getting any money back. Chairman Michael Kim built the company into a major Asian fund over twenty years, but recent deals have gone wrong.
The firm bought Home Plus from Tesco for over five billion dollars back in 2015. Online shopping and the pandemic hurt the grocery chain badly. Home Plus lost money for four straight years and piled up massive debts. The company filed for bankruptcy protection in March.
Politicians are angry about how MBK handled the situation. National Assembly Speaker Woo Won-shik says the fund acted without responsibility. He wants new laws to control private equity companies better. About 100,000 workers could lose their jobs because of the mess.
MBK also wants to sell its piece of Lotte Card but struggles to find buyers. The credit card company made much less profit last year than before. The fund hoped to get over two billion dollars for its share but may have to accept far less money.
Experts worry that MBK's aggressive business approach has stopped working. The company used lots of borrowed money to buy other firms and tried to make quick profits. Some professors think South Korea needs better rules for buyout funds, but they worry that too many restrictions could hurt the financial markets.
The firm bought Home Plus from Tesco for over five billion dollars back in 2015. Online shopping and the pandemic hurt the grocery chain badly. Home Plus lost money for four straight years and piled up massive debts. The company filed for bankruptcy protection in March.
Politicians are angry about how MBK handled the situation. National Assembly Speaker Woo Won-shik says the fund acted without responsibility. He wants new laws to control private equity companies better. About 100,000 workers could lose their jobs because of the mess.
MBK also wants to sell its piece of Lotte Card but struggles to find buyers. The credit card company made much less profit last year than before. The fund hoped to get over two billion dollars for its share but may have to accept far less money.
Experts worry that MBK's aggressive business approach has stopped working. The company used lots of borrowed money to buy other firms and tried to make quick profits. Some professors think South Korea needs better rules for buyout funds, but they worry that too many restrictions could hurt the financial markets.
