Steinhoff proceeding with sale of Austrian subsidiary Kika-Leiner

Steinhoff announced on Friday afternoon that following the go-ahead from the competition authorities, it had completed the sale of the Austrian operating company of furniture retailer Kika-Leiner.  

The sale of the Kika-Leiner operating companies in the Czech Republic and Slovakia remains conditional upon merger clearance being received from their respective competition authorities, it said. 

Steinhoff CEO Danie van der Merwe said last month that Steinhoff was selling the furniture chain following the withdrawal of credit insurance cover.

"[The withdrawal] created significant liquidity constraints for the Kika/Leiner businesses, which would have placed significant further cash demands on the wider Steinhoff Group," he said. 

Van der Merwe said that the Kika-Leiner businesses were both loss-making, and would require "significant investment" to turnaround. 

Steinhoff previously said the retail companies would be sold to Austrian real estate and retail holding group SIGNA.

While the Kika-Leiner operating companies would be sold to SIGNA at a "nominal cost", the operating companies would be sold based on an enterprise value of about €490m.

The sale of the property holding companies would only proceed once competition authorities in Austria, Czech Republic and Slovakia had approved the sale of the operating groups. 

Last month SIGNA said its takeover over Kika-Leiner would mean the threat of insolvency could be averted. 

"The company has great intrinsic value. After carrying out a careful analysis, we are absolutely certain that the company can be put back on its feet and be successful once again," Dr. Stephan Fanderl, the managing director of SIGNA Retail, said in a statement in mid-June.