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Steinhoff wins creditor support for debt restructuring plan

Jul 19 2018 18:00
Luca Casiraghi and Janice Kew, Bloomberg

Steinhoff International Holdings [JSE:SNH] won support from a majority of creditors to restructure its $11bn (about R149bn) of debt, seen by the embattled retailer as a vital step toward its recovery from an accounting scandal.

The owner of Conforama in France and Mattress Firm in the US sought a three-year extension to payments due to lenders and bondholders as the South African company repairs its balance sheet.

About 89% of holders of debt in Steinhoff Europe agreed to the terms and the retailer will seek to wrap up the plan by the Friday deadline, according to a Thursday statement.

The shares gained 17% to R3.61 as of 16:57 in Frankfurt, where the company moved its primary listing from Johannesburg in 2015. The stock has shed 93% of its value since late last year, when Steinhoff reported financial irregularities and Chief Executive Officer Markus Jooste quit.

Between 92% and 99% of holders of convertible bonds due 2021, 2022 and 2023 issued out of Steinhoff Finance Holding backed the plan, while holders of 89% of Stripes US Holding debt signed the agreement.

The company still needs to complete final steps before the lock-up agreement with creditors becomes effective, Steinhoff said.

‘Going concern’

One of the conditions is that directors of Steinhoff’s Austrian units Finance Holding and Steinhoff Europe  must establish a “positive going concern,” it said in a statement last week.

If the agreement fails to come into force by Friday, the boards of the subsidiaries “will need to assess their options, including local reorganization procedures, and obligations under the applicable Austrian law,” the company said.

The German-listed retailer also set out the terms of a restructuring of its real estate arm’s €750m of loans maturing August 3.

Steinhoff wants lenders to roll over into a new three-year senior secured facility offering a 10% interest rate, payable in cash or with more debt, it said in a separate statement on Thursday.

Hemisphere will need to agree an asset disposal plan with lenders within three months of the restructuring, Steinhoff said.

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steinhoff  |  retail  |  credit  |  loans
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