Anxious wait for Steinhoff
• Deadline for credit extension falls just hours before release of results
Steinhoff Holdings is set to release its interim results on Friday afternoon, hours after the deadline for creditors of key subsidiaries to agree to an extension of the freezing of their claims. The two subsidiaries are Austrianbased Steinhoff Europe and Steinhoff Finance Holdings.
Steinhoff Holdings is set to release its interim results on Friday afternoon, hours after the deadline for creditors of key subsidiaries to agree to an extension of the freezing of their claims. The two subsidiaries are Austrian-based Steinhoff Europe AG (SEAG) and Steinhoff Finance Holdings.
Holdings wants creditors to extend the deadline to July 20 from June 30.
The tightness of the deadline highlights just how precarious the Steinhoff situation is, said one analyst who asked not to be named. If the board is unable to secure the necessary support for an extension, it might have to initiate liquidation proceedings.
Chris Logan of Opportune Investments said the danger of proceeding with liquidation against SEAG and Holdings was the likelihood of cross-guarantees with other companies in the Steinhoff group.
On Wednesday Steinhoff informed creditors they must confirm they agree to the extension by no later than 10am Austrian time on Friday.
The board said if the majority of creditors did not agree to the proposed extension “the boards of SEAG and Holdings will need to assess their options, including local reorganisation procedures, and obligations under the applicable Austrian law”.
One of the affected creditors, a hedge fund that had purchased Steinhoff bonds in December shortly after the board announced there had been “accounting irregularities”, told Business Day he welcomed the initial request for support.
“This indicated creditors are banding together to find a solution to an otherwise complicated situation,” said the UKbased hedge fund manager who did not want to be named.
At the group’s annual general meeting in April chairwoman Heather Sonn told shareholders the group had been relying on assets sales to fund ongoing working capital, interest and the fees of professional advisers.
She cautioned that the situation was not sustainable. The urgent request for an extension means the board has not yet been able to reach a restructuring agreement with key players.
“Beyond the next few weeks, the board is looking for a longterm standstill so that it can negotiate the sale of assets,” said retail analyst Syd Vianello.
He said Steinhoff’s list of creditors was now dominated by hedge funds that have bought up the group’s debt at discounted prices in the hope of making a profit.
“The best case scenario is an orderly payment of debt, the worst case is the dismantling and sale of the group,” he said.
Vianello said that the hedge funds would have to be paid out before shareholders such as former chairman Christo Wiese and GT Ferreira.
The results due out on Friday are expected to provide the most clear indication of the group’s situation since the board withdrew the previously released financial statements dating back to 2015.
In April Sonn told shareholders that the interim results would include the income statements for the six months ended March 31 2018 and March 31 2017 and the balance sheet as at end March 2018 and March 2017 as well as September 2017. Cash flow statements for the six months will also be released.
Vianello said the results were likely to remind shareholders that Steinhoff Africa Retail, which is 71% owned by Steinhoff, remained the most attractive asset. Conforama, Pep Europe and the Australian operations were also expected to report decent results.
THIS INDICATED THAT CREDITORS ARE BANDING TOGETHER TO FIND A SOLUTION TO A COMPLICATED SITUATION