Steinhoff wins creditor aid

Steinhoff won support from a majority of creditors to restructure its €9.4 billion (R148 billion) of debt, seen by the embattled retailer as a vital step toward its recovery from an accounting scandal.

The company sought a threeyear extension to payments due to lenders and bondholders as it repairs its balance sheet. About 89% of holders of debt in Steinhoff Europe agreed to the terms.

The shares gained 12% in Frankfurt, where the company moved its primary listing from Johannesburg in 2015. The stock has shed 93% of its value since late last year, when Steinhoff reported financial irregularities and chief executive Markus Jooste quit.

Between 92% and 99% of holders of convertible bonds due in 2021, 2022 and 2023 issued out of Steinhoff Finance Holding backed the plan, while holders of 89% of Stripes US Holding debt signed the agreement.

The company still needs to complete final steps before the lock-up agreement with creditors becomes effective, Steinhoff said.

One of the conditions is that directors of its Austrian units Finance Holding GmbH and Europe must establish a “positive going concern”, it said last week. If the agreement fails to come into force by today, the boards of the subsidiaries “will need to assess their options, including local reorganisation procedures, and obligations under the applicable Austrian law”.– Bloomberg