Still counting the costs
Steinhoff’s recent process update reads a little like a communiqué from the Titanic shortly after it rammed the growler.
The bean counters from PWC have been crawling all over the company’s books for four and a half months, and their findings are substantially in line with the irregularities unearthed by their compadres at Deloitte. Initial estimates into the quantum of dubious assets were around the €6bn mark, and the woeful news is that this may have been optimistic.
Steinhoff’s debt situation will be generating many a sleepless night in the banking fraternity, with total outstanding external debt of €10.4bn constituting a large enough number to concentrate the mind. The company is making good progress at paying down its African debt but the numbers are more significant in Europe, and a restructuring proposal will be put to the lenders in what could be a fairly lively meeting. The group has been funding itself through asset realisations, but the restructuring will aim to put it on a more sustainable footing.
Clearly the directors have a lot on their plates, but they are also having to repel boarders in the form of a slew of litigation, including a claim of
Us$4.8bn from entities connected to Steinhoff’s former chair, Christo
Wiese, to cover losses caused by his disastrous involvement with the group.
Steinhoff promises “to vigorously defend the Wiese entities’ action”, pointing to Wiese’s intimate involvement in and with the group over many years. With proceedings promised against former CEO Markus Jooste, there’s plenty more to come before this story is over.