Nqobile Dludla and Eamon Quinn
Scandal-hit retailer Steinhoff said it had refinanced some €9bn of debt in its overseas operations which include Dealz in the Republic, Poundland in the North and Britain, and France’s Conforama, after pushing the deadline date back repeatedly.
“Implementation of the restructuring is a major milestone on our recovery journey, bringing with it the stability that will allow us to turn the page and concentrate fully on maximizing value from our operating companies,” chief executive of the South African retailing group, Louis du Preez said.
“The company remains committed to improving the performance of its operational businesses across the group, reducing its debt, resolving the legal claims against it and delivering value for its stakeholders,” he said.
Earlier this week, Mr du Preez delivered a stark assessment of Steinhoff’s options at the South African company’s first public investor presentation since a €6.25bn accounting fraud scandal broke, saying its only hope for survival is to sell off assets to become a retail-focused holding company.
Shares in Steinhoff which rose 1.6% in Johannesburg in the latest session have lost about 40% of their value in the past year.
Established more than 50 years ago, the firm expanded from a small South African outfit to a furniture and household goods retailer straddling four continents before it shocked investors by flagging holes in its accounts in December 2017.
It has around 70 stores trading under the Dealz and Poundland names across Ireland. Early last year, it expanded its fashion clothing lines in an apparent bid to compete with Penneys.
Its Steinhoff Europe, or Seag, and Steinhoff Finance Holding, or Sfhg, operations had entered into a company voluntary arrangement (CVA) in the UK with its creditors last year.
A CVA is a UK legal process that allows a company with debt problems to reach a voluntary agreement with creditors over the payment of its debts while continuing to trade.
Seag’s €5.6bn of debt, plus around €2.8bn from Sfhg and a further €400,000 from another business has been reissued with maturities from December 2021 and no cash interest payments.
The company is now up to date with its financial reporting and expects to publish an unaudited quarterly update for the three months to the end of June 30 at the end of this month.