Steinhoff asks creditors for additional-three week lifeline

Troubled retailer Steinhoff on Wednesday announced that it had asked creditors to extend debt lifelines to two of its European subsidies by an additional three weeks. 

Earlier in June, Steinhoff International, the global retailer's parent company, announced that it had come to an agreement with creditor groups for two of its subsidiaries - Steinhoff Europe AG ("SEAG") and Steinhoff Finance Holding GmbH.

The two holding companies are the principal finance companies of the group’s European business.

In a media statement earlier in the month, Steinhoff said that creditor groups had agreed to hold off on demanding debt be paid back until June 30, while the company undergoes a restructuring. 

Creditors would also not bring legal proceedings against any member of the group during this support period.  

Steinhoff has now asked its creditors to extend this support period to July 20. 

"Since the original support letter announcements, the group has continued discussions with its creditors to agree the terms of a consensual restructuring plan and a lock-up agreement with respect to the implementation of the restructuring plan," said Steinhoff in a statement on Wednesday. 

Steinhoff added that, if its proposals to extend the support were not agreed to by creditor groups by Friday June 29, the boards of SEAG and Steinhoff Finance Holding GmbH would have to "assess their options (including local reorganisation procedures) and obligations under the applicable Austrian law".

Steinhoff shares have plunged by over 95% since early December 2017, when its CEO Markus Jooste stepped down amid an ongoing accounting scandal.