JOHANNESBURG - Steinhoff International has given its creditors a glimmer of hope by stating that it is able to operate its business on short-term funding for its various businesses after securing some liquidity in the past few days.
In a meeting with its lenders on Friday in London, the retailer committed to giving a quarterly trading update at the end of February.
Steinhoff’s subsidiary Conforama in France said its financing position has been secured and it has a commitment letter signed for an asset-based lending facility of 115million (R1.69billion).
The execution is expected today along with first drawdown. In addition it has sold a non-core asset, a 17percentstake in Showroomprivé to Carrefour, which was announced on January 11 for net proceeds of 79m.
In the UK, Steinhoff has managed to raise £260m (R4.36bn), an increase from the £180m of new funding announced on January 3.
The US subsidiary Mattress Firm arranged a $75m (R888.44m) senior secured asset-backed revolving credit facility in December while its Austrian business Kika Leiner announced that is had agreed a restructuring plan last Wednesday.
Its business in Asia Pacific is continuing with discussions with their banks to secure additional funding by mid-February.
Update
Steinhoff’s share price was in positive territory as they closed 1.48percent higher on the JSE after the update.
“The group continues to take steps to maintain stability of its operations and immediate operational liquidity requirements have been largely addressed,” the group said in a statement.
It added that the focus can now start to shift to the next phase.
In South Africa the group agreed with its lenders that African subsidiaries would repay 200m of intercompany loans due to non-South African
entities, funded from PSG
share sale proceeds, subject to documentation and certain conditions and regulatory approvals.
The group raised R7.1bn for the sale of its shares in investment company PSG Group. “The group is working to repay all the debt of the South African holding companies in the near-term,” it said.
The group is trying to put its operations back on a sound footing after it lost around R200bn in market capitalisation as the share price declined by 85percent in early December when it admitted to accounting irregularities after it failed to publish the results for the year-end September.
The group said the PwC investigation is still ongoing.
