SHAREHOLDERS holding about 20 of Steinhoff International Holdings shares on Friday shot down one of the two options its management may have had to further the restructuring of the global retailer, the issuing of shares to reduce its high debt level.
At the annual meeting in Amsterdam and online, shareholders voted strongly against resolutions that would have given its directors powers to authorise shares, such as for a rights issue to raise capital.
Chief executive Louis du Preez said in the meeting that, following the accounting irregularities and fraud that occurred until 2017, which saw Steinhoff go into “freefall” with many believing its liquidation to be inevitable, a three-stage restructuring was implemented involving arrangements with creditors, dealing with litigation issues and finally, restructuring the debt.
With the global settlement to potential litigants settled in February, the strategy forward was to restructure the existing debt arrangements to past the 2023 due date, and to get the interest rate on the debt lowered because the group’s risk profile had improved substantially this year.
The group’s “going concern” risk had reduced following the publication of its first unqualified annual report in four years, for the 2021 financial year, in February. The group also wished to reduce its debt.
He said the group could do this through two ways, either through further asset sales, or through “optionality around our equity” although he added there were at present, no fixed plans to issue equity.
He said although Steinhoff had come a long way in its restructuring since 2017, it was still a company “in distress”, as its debt and the interest rate that it paid on the debts were high.
Responding to a question from a shareholder about the low shareholder turnout, he said they would have liked a higher turnout, but they also understood that most of the shareholders were retail shareholders (these often do not attend annual meetings), the shareholders were very diverse, and the group also had regular interaction with its shareholders.
Some 30 percent of Steinhoff International Holdings is owned by South African shareholders, including the Public Investment Corporation, while 70 percent are foreign shareholders.
Dealing with the war in Ukraine, Du Preez said the group operates some 1 200 stores in Poland, which borders Ukraine, and while the war was fast changing, the focus was on the safety of staff and repurposing corporate social investment budgets there, as more than 2 million refugees from Ukraine had entered Poland.
He said no decision had been made when the planned initial public offering of Mattress Firm , to raise up to $100 million (R1.4 billion), would take place in the US. At the annual meeting, shareholders also voted against some of the amendments to remuneration policies.
Steinhoff’s net debt at the end of the 2020 financial year stood at €9.46bn (R152bn).
Assets for sale in 2020 included properties in Africa. Blue Group, Unitrans, Hemisphere, ABRA, Greenlit Brands GM division, Sherwood Bedding and Conforama France and Switzerland.