Investors take flight at Steinhoff settlement

By Sandile Mchunu Time of article published Mar 5, 2021

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Steinhoff International shares tumbled more than 13 percent yesterday after the retailer said it would make available R6.54 billion as total settlement consideration to market purchase claimants (MPC) and contractual claimants against it.

The group said the estimated share of MPCs would be €266m.

The group said the settlement consideration would be paid through its Stichting Steinhoff Recovery Foundation (SRF) by way of 50 percent in cash and 50 percent in shares indirectly owned by the group in Pepkor Holdings at a deemed price of R15 a share.

Steinhoff's participating claimants are categorised as MPCs, contractual claimants and financial creditors.

The group said the proposed global settlement required the support of participating claimants, and the implementation process was expected to take a number of months.

Steinhoff said the implementation of the Steinhoff global settlement would require the requisite support of claimants and approvals by the Dutch and South African courts.

The offer comes after Steinhoff made an application to the Amsterdam District Court on Monday for a suspension of payments procedure (Dutch SoP), which was followed by the launching of a statutory compromise process under South African law (S155 Scheme), also as part of the implementation of the Steinhoff Group global settlement.

“The purpose of the Dutch SoP process and the S155 Scheme is to implement the proposal to settle certain multi-jurisdictional legacy litigation and various claims against Steinhoff International Holding NV and Steinhoff International Holdings Proprietary Limited,” the group said.

Chief executive Louis du Preez said the settlement of legacy litigation was a critical priority for the group.

“Implementation of these processes is an important step forward, giving participating claimants the opportunity to approve the proposals and open the pathway to realise some value from their claims,” Du Preez said.

“A successful approval would also offer the Steinhoff Group, and all its stakeholders, the chance to move ahead and address the remaining challenges. We encourage claimants to engage with the process and back the proposals.”

Steinhoff has already been given support by Deloitte after its former auditor agreed to pay e70.34m to claimants on Monday. However, it emphasised that it was not admitting to any wrongdoing.

Conservatorium also withdrew its application to appoint a restructuring expert yesterday after the parties were involved in constructive engagements.

The claims against Steinhoff were a result of the December 2017 admission to accounting irregularities that led to its share price declining by more than 90 percent and a loss of more than R200bn in it market capitalisation.

Steinhoff shares closed 15.33 percent lower at R2.32 yesterday

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