Jooste has 8 months to get R2bn

Steinhoff International’s former CEO 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.

His personal investment company, Mayfair Holdings, has been given until the end of the year by lenders to sell as much as R2.08 billion in assets, ranging from real estate to race horses, to repay almost R1.6 billion of defaulted loans, according to an agreement between Mayfair and its creditors seen by Bloomberg.

Creditors include two companies tied to Jooste and his son-in-law, Stefan Potgieter, which may realise over R200 million from the disposals, the documents show. Mayfair will also be able to keep any proceeds left over after creditors are repaid.

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 banks including Sanlam’s capital markets arm, Investec Plc and Absa, a banking unit of Barclays Africa Group, an option to liquidate the company or come up with a breakup proposal to release capital. The lenders agreed the latter would realise more value. Mayfair owes the three banks a combined R959 million.

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, adding that all creditors backed the plan.

As well as the R200 million owed to companies linked to the ex-CEO and Potgieter, a further R420 million 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.

Sanlam reiterated that the creditors saw an orderly sale process as realising more value than a liquidation. –