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Steinhoff shares gain on plan to start debt restructuring deal

Jul 11 2018 16:26
Luca Casiraghi and Janice Kew, Bloomberg, with Fin24

Steinhoff International Holdings [JSE:SNH] has started a consent process with creditors to finalise a debt restructuring plan that will support the retailer’s balance sheet for three years and prevent a potential collapse.

The owner of retail brands including Poundland in the UK and Conforama in France has been negotiating for months with creditor groups represented by financial advisers FTI Consulting, Houlihan Lokey, and PJT Partners to reach an agreement on a standstill.

In May, it proposed a three-year debt extension across all its holding companies’ loans and bonds from the restructuring date, with no cash interest payments for the period.

Steinhoff has been on the brink of insolvency after revealing accounting irregularities in December. The company has about €9.4bn (about R148.3bn) of debt and last month said it had written off the value of assets by €12.4bn (about R195bn) as part of an investigation by auditors at PwC.

The shares extended gains on Wednesday, climbing as much as 9.2% in Frankfurt after the announcement. The stock is down 96% since the crisis erupted.

Steinhoff shares were trading at R2.38 a share on the JSE at 16.06, up 27%. Steinhoff needs to secure creditor support for the plan by July 20, the company said in a statement.

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