RESTRUCTURING

FRESH DILEMMA FOR STEINHOFF

STEINHOFF International and its subsidiaries are facing yet another dilemma as the deadline to implement its financial restructuring under the lock-up agreement draws closer, and now the troubled retailer has asked for another extension from its creditors. The initial deadline was set for March 29 and Steinhoff is asking for this deadline to be extended to June 28. The group has requested an extension for the restructuring in relation to its two subsidiaries, Steinhoff Europe AG (SEAG) and Steinhoff Finance Holding GmbH (SFHG). The group is asking two consents from its creditors: a request for extension of a long-stop date under the SEAG company voluntary arrangement (CVA), the SFHG CVA and the long lock-up agreement, and the second consent, a request to amend certain terms of the SEAG CVA and the SFHG CVA. The creditors initially approved the CVA in relation to SEAG and SFHG on December 14 last year by the requisite majority of their creditors. The CVA entails giving Steinhoff an opportunity to restructure its three series of equity-linked bonds due in 2021, 2022 and 2023 into new secured loans. Both the SEAG CVA and SFHG CVA were approved by majority votes by their creditors in December last year. On Wednesday Steinhoff said it was unlikely SEAG and SFHG would be in a position to implement all of the restructuring steps set out in the SEAG CVA and the SFHG CVA on or prior to the CVA longstop date, currently March 29. The SEAG restructuring got a blow in January when Steinhoff heard an application issued by LSW GmbH, a firm claiming to be a creditor of SEAG, challenging the SEAG CVA. Steinhoff’s share price closed 3.17 percent lower on the JSE at R1.84 a share. |