CAPE TOWN - Steinhoff International Holdings NV’s former Chief Executive Officer Markus Jooste has been thrown a lifeline by banks as the global retailer he oversaw for 18 years struggles to survive an accounting scandal that happened under his watch.
The 57-year-old’s personal investment company Mayfair Holdings Pty Ltd. has been given until the end of the year by lenders to sell as much as R2.08 billion ($167 million) in assets ranging from real estate to racehorses to repay almost R1.6 billion of defaulted loans, according to an agreement between Mayfair and its creditors seen by Bloomberg.
Creditors include two companies tied to Jooste and his son-in-law, Stefan Potgieter, which may realize more than R200 million from the disposals, the documents show. Mayfair will also be able to keep any proceeds left over after creditors are repaid, which could amount to about R500 million.
After Steinhoff shares crashed when the company reported a hole in its accounts in December, Mayfair defaulted on the loans and wasn’t able to immediately repay them. That gave banks including Sanlam Ltd.’s capital markets arm, Investec Plc and Absa, a banking unit of Barclays Africa Group Ltd., an option to liquidate the company or come up with a breakup proposal to release capital. The lenders agreed that the latter would realize more value. Mayfair owes the three banks a combined R959 million.
Steinhoff has distanced itself from the former CEO, who quit on Dec. 5, and have referred him to an anti-corruption police unit. The owner of Conforama in France and Mattress Firm in the U.S. has also started a probe into its finances that has so far uncovered the inflation of income and asset values over several years. The investigation is ongoing.