Steinhoff’s ex-CEO set to cash in after striking deal with banks
JOHANNESBURG: Steinhoff International Holdings NV’s former chief executive officer Markus Jooste has been thrown a lifeline by banks as the global retailer he oversaw for 18 years struggles to survive an accounting scandal that happened under his watch.
The 57-year-old’s personal investment company Mayfair Holdings Pty Ltd owes Sanlam Ltd’s capital markets arm, Investec Plc and Absa, a banking unit of Barclays Africa Group Ltd, a combined 959 million rand (US$78mil) backed by Steinhoff stock, according to an agreement between Mayfair and its creditors seen by Bloomberg.
After Steinhoff shares crashed when the company reported a hole in its accounts in December, Mayfair defaulted on the loans and wasn’t able to immediately repay them. That gave the banks an option to liquidate the company or come up with a break-up proposal to release capital.
The lenders agreed that the latter would realise more value, and have given Mayfair until the end of this year to sell as much as 2.08 billion rand in assets ranging from real estate to racehorses to repay almost 1.6 billion rand of loans to the banks and other creditors.
As well as the lenders, creditors include two companies tied to Jooste and his son-inlaw, Stefan Potgieter, which may realise more than 200 million rand from the disposals, the documents show. Mayfair will also be able to keep any proceeds left over after creditors are repaid, which could amount to about 500 million rand.
Steinhoff has distanced itself from the former CEO, who quit on Dec 5, and have referred him to an anti-corruption police unit. The owner of Conforama in France and Mattress Firm in the US has also started a probe into its finances that has so far uncovered the inflation of income and asset values over several years. The investigation is ongoing.
A so-called scheme of compromise “allowed a standstill until December 2018 to allow the Mayfair entities to sell assets in an orderly manner to benefit all creditors,” Absa said in an e-mailed response to questions, that all creditors backed the plan.
A person who answered the phone at Mayfair’s Cape Town office said the company wouldn’t comment. Jooste didn’t respond to a mobile-phone message seeking comment.
As well as the 200 million rand owed to companies linked to the ex-CEO and Potgieter, a further 420 million rand is owed to a company owned by Malcolm King, a property tycoon and one of Jooste’s friends, the scheme of arrangement shows.
Potgieter is the sole director of Mayfair after Jooste quit in December. Neither Potgieter nor King immediately responded to e-mailed requests for comment. — Bloomberg adding