The Public Investment Corporation (PIC), which manages assets worth over R1 trillion on behalf of government employees, is backing the Steinhoff global settlement programme, it said on Monday.
The PIC told the market it had entered into a settlement agreement to support the implementation of the Steinhoff global settlement. Steinhoff International Holdings, is facing a tidal wave of litigation by shareholders who lost billions following the 2017 accounting scandal.
“The PIC believes the proposed settlement is in the best interests of its clients, given the alternative cost of protracted litigation and related uncertainties, and the prospect of further diminishing share value. It attempts to provide certainty and will allow Steinhoff the opportunity to recover as a company, to continue trading as a going concern and to avoid further job losses,” said the PIC.
The PIC said details of the proposed settlement agreement could only be disclosed once due legal process has been concluded.
“The settlement agreement does not preclude the PIC from pursuing further litigation against former Steinhoff directors and employees, if found responsible for the accounting irregularities and ultimate destruction of value at Steinhoff. The PIC will continue to co-operate fully and assist law-enforcement agencies in respect of any criminal proceedings,” said the PIC.
The PIC, which owns 8.56 percent of Steinhoff shares on behalf of its clients, joined a group of approximately 40 institutional investors who brought damages claims against Steinhoff International Holdings NV (SIHNV) before the Dutch court in 2018. A process of mediation ensued thereafter, it said.
Earlier on Monday Steinhoff held two out of three creditors class meetings in terms of section 155 of the South African Companies Act. The S155 Scheme was launched in February, as part of the implementation of the Steinhoff Group global settlement for shareholders lost out when the share price plunged in 2017 following accounting irregularities.
“The board of SIHPL is pleased to report that its S155 Proposal has obtained sufficient support to pass the applicable statutory thresholds for approval a majority in number representing at least 75 percent by value from the SIHPL Financial Creditors and the SIHPL MPCs at their respective meetings,” said Steinhoff.
Steinhoff said in terms of the S155 scheme proposal it would provide settlement consideration in two portions with a first portion equal to 50 percent of the total consideration payable in cash; and a second portion equal to 50 percent of the total consideration payable in Pepkor Africa (PPH) shares at R15 a share or a greater amount in cash.
“Steinhoff has been considering its options in respect of the second portion of settlement consideration in view of the recent PPH share price and the possibility that such second portion will be settled in cash,” said the group.
The group said the settlement spot price would be R19.82 a PPH share.
Last month the group said one of its hostile groups of shareholders fighting for damages, the Hamilton Group had warmed up to the settlement.
Steinhoff said on Monday that Hamilton entities had now entered into a settlement support letter with SIHNV and SIHPL to confirm their support for the Steinhoff global settlement proposal.
“The Hamilton settlement support letter includes provision for a contribution of €500 000 (R8.5 million) in respect of legal costs incurred by Hamilton in the course of the recent S.45 proceedings and the class composition proceedings before the High Court of South Africa,” it said.
Last month Steinhoff proposed making an additional R3 billion payment for investors who suffered losses due to its accounting scandal of 2017.
BUSINESS REPORT ONLINE