Steinhoff woes con­tinue to pile up in Europe

Fi­nan­cial re­struc­tur­ing plans chal­lenged

The Star Late Edition - - BR - SANDILE MCHUNU [email protected]

TROU­BLED re­tailer Steinhoff In­ter­na­tional’s woes con­tinue to pile up as one of the cred­i­tors, LSW, is chal­leng­ing the com­pany’s fi­nan­cial re­struc­tur­ing plans. Steinhoff said on Fri­day that its sub­sidiary Steinhoff Europe (Seag) had on Fri­day been no­ti­fied of an ap­pli­ca­tion is­sued by LSW, a com­pany claim­ing to be a cred­i­tor of Seag, chal­leng­ing the com­pany vol­un­tary ar­range­ment (CVA) pro­posed in re­la­tion to Seag an­nounced on De­cem­ber 14.

As a re­sult of this chal­lenge, Steinhoff said, and in ac­cor­dance with the terms of the Seag CVA, im­ple­men­ta­tion of the Seag CVA would not oc­cur un­til the chal­lenge to the Seag CVA had been re­solved.

The com­pany’s vol­un­tary ar­range­ment en­tails giv­ing Steinhoff an op­por­tu­nity to re­struc­ture its three se­ries of eq­uity-linked bonds due in 2021, 2022 and 2023 into new se­cured loans.

“Un­der the terms of the com­pany vol­un­tary ar­range­ment pro­posed in re­la­tion to Steinhoff Fi­nance Hold­ing GmbH (SFHG CVA) an­nounced on De­cem­ber 14, 2018, im­ple­men­ta­tion of the SFHG CVA will like­wise not oc­cur un­til the chal­lenge to the Seag CVA has been re­solved,” Steinhoff said.

The group added that the rel­e­vant terms of the Seag CVA and the SFHG CVA, in­clud­ing the in­terim mora­to­ria, con­tin­ued to ap­ply.

“The com­pany con­tin­ues to work to­wards the im­ple­men­ta­tion of the fi­nan­cial re­struc­tur­ing of the group and man­age­ment con­tin­ues to sup­port and fo­cus on the on­go­ing op­er­a­tions,” the group said.

Steinhoff was plunged into fi­nan­cial cri­sis in De­cem­ber 2017 when it ad­mit­ted to ac­count­ing ir­reg­u­lar­i­ties which led to a 95 per­cent de­cline in its share price. It also shed more than R200 bil­lion in mar­ket cap­i­tal­i­sa­tion with for­mer chief ex­ec­u­tive Markus Jooste re­sign­ing from his post.

The group is yet to re­lease its fi­nan­cial re­sults for 2017 and 2018. It in­formed the in­vestors in De­cem­ber last year that the re­sults would be re­leased in mid-April 2019.

This hap­pened after it missed an ear­lier dead­line of De­cem­ber 2018 that it had set it­self at the be­gin­ning of last year as Price­wa­ter­house­Coop­ers con­tin­ues with the in­de­pen­dent foren­sic in­ves­ti­ga­tion.

The group’s share price was not neg­a­tively im­pacted by the lat­est re­ports, although it was flat at R1.69 a share on the JSE dur­ing most of Fri­day.

The group re­sorted to its cred­i­tors in an at­tempt to seek ex­ten­sion for the pay­ment of its debt last year.

In Au­gust last year Steinhoff In­ter­na­tional prop­erty port­fo­lio, Hemi­sphere In­ter­na­tional Prop­er­ties, also an­nounced that 100 per­cent in value of the third-party cred­i­tors un­der Hemi­sphere’s €750 mil­lion (R11.86 bil­lion) re­volv­ing credit fa­cil­ity have now en­tered into the Hemi­sphere lock-up agree­ment. Un­der the lock-up agree­ment, Steinhoff was seek­ing a three­year ex­ten­sion to pay­ments due to lenders and bond­hold­ers.

The deal struck with the lenders might just pro­vide the com­pany with a breath­ing space and solve some liq­uid­ity cri­sis as it re­struc­tures its bal­ance sheet.

Steinhoff shares rose 0.59 per­cent to close at R1.70 on Fri­day.

THE FOR­MER chief ex­ec­u­tive of Steinhoff, Markus Jooste. | Reuters

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