Mattress Firm shakes off bankruptcy to give Steinhoff a cushion
STEINHOFF International said yesterday that its US-based subsidiary Mattress Firm had emerged from bankruptcy, raising $525 million (R7.34 billion) in exit financing to support its operations.
Acting chief executive Danie van der Merwe said the firm managed to emerge from the cumbersome Chapter 11 process within the 45- to 60-day time-frame initially targeted.
Van der Merwe said the move would allow Mattress Firm to operate outside the stringent purses of its embattled parent.
“This short process has enabled Mattress Firm to strengthen its balance sheet and optimise its store footprint, and it emerges as a stronger and more competitive company,” Van der Merwe said.
“Today’s announcement is a further positive step in the wider Steinhoff restructuring process, which continues to make good progress.”
Steinhoff bought Mattress Firm for $3.8bn in 2016. However, the transaction proved a nightmare after the bed retailer filed for bankruptcy in October and announced that it was planning to close up to 700 stores.
Mattress Firm then proceeded with plans to speed through a US Chapter 11 bankruptcy within 45 to 60 days along with the court filing in Wilmington, Delaware.
The process included the shaving off of some of its more than $3.2bn debt, and using bankruptcy law power to break unattractive leases.
Mattress Firm also issued shareholdings to lenders in order to stay in business in a reconfigured business.
On Monday, Steinhoff appointed Louis du Preez as permanent chief executive to reignite its fortunes.
Du Preez and van Merwe were instrumental in steering Steinhoff and leading the restructuring of nearly $11bn in debt.
The appointment sent the stock rallying 16 percent, backed by the granting of the bankruptcy application to Mattress Firm.
Steinhoff shares rose 2.20 percent on the JSE yesterday to close at R1.86.