Jooste granted debt extension

REPAYMENTS: EX-STEINHOFF CE HAS UNTIL MARCH 31, ’19

Mayfair Holdings owes R959 million to Sanlam, Investec and Absa Group.

Banks granted Steinhoff International’s former chief executive Markus Jooste another extension to pay back his debt as the global retailer that he headed struggles to survive an accounting scandal that happened under his watch.

Jooste’s investment company, Mayfair Holdings, struck a deal with banks in March this year to sell assets of more than $2 billion (about R28.4 billion) to repay debt owed to the lenders by December.

Lenders and other creditors have now agreed that Jooste has until March 31, 2019 to repay his debts, Mayfair’s sole director Stefan Potgieter told some stakeholders in an email. Potgieter confirmed the extension.

Potgieter, who is also Jooste’s son-in-law, wrote: “We continue to enjoy the support of our creditors for an orderly process in the interest of all stakeholders, which might include further postponements of deadlines, if needs be.”

Mayfair’s biggest asset is candymaker Lodestone Brands.

The founders of the company, whose brands include Rascals candies and Champion toffees, remain minority shareholders and are considering making an offer to buy back the business, said people familiar with the situation, who asked not to be named.

Such an offer would cover the R959 million in debt owed to Mayfair’s three main lenders – Absa, Investec, and Sanlam – according to the people, declining to say how much the minorities would propose paying.

After Steinhoff shares crashed when it reported a hole in its accounts in December, Mayfair defaulted on its share-backed loans. That gave banks an option to liquidate the company or come up with a breakup proposal to release capital.

While the three lenders agreed that the latter course would realise more value, there have been no significant disposals to date and the three banks continue to hold the debt on their books. Mayfair was also involved in horse racing.

“Any suggestion that we’re not dealing with the matter in the usual manner by, for example, being unduly lenient to Mayfair is inaccurate,” said an Absa spokesperson. “It is Absa’s intention to pursue the scheme-of-arrangement process, as well as any other legal remedies that may be available to it, until such time as all obligations owed by Mayfair to Absa are fulfilled.”

Investec and Sanlam confirmed that an extension has been granted.

Steinhoff’s stock has plunged about 95% since it said on December 5 that Jooste is leaving the company and that the retailer’s accounts will be investigated.

Jooste told a parliamentary hearing earlier this month that he denied knowledge of any financial irregularities. – Bloomberg

Mayfair was also involved in horseracing.