A COMPANY sign on the Steinhoff International Holdings company headquarters in Stellenbosch.     Dwayne Senior Bloomberg
A COMPANY sign on the Steinhoff International Holdings company headquarters in Stellenbosch. Dwayne Senior Bloomberg

Steinhoff has another breather as VEB suspends claims by 6 weeks

By Sandile Mchunu Time of article published Apr 3, 2019

Share this article:

DURBAN – Troubled retailer Steinhoff International's share price traded weaker yesterday, despite the group reaching an agreement with Dutch investor group VEB to suspend its claims by another six weeks. 

The share fell 1.62 percent on the JSE yesterday to close at R1.82, despite the temporary relief. Steinhoff said investment group VEB and European investors had agreed to extend the suspension of the collective action between them in the Netherlands for a further six weeks until May 15. 

VEB launched a lawsuit against Steinhoff last year after the share price declined by more than 95 percent following the admission to accounting irregularities in December 2017.

Steinhoff’s former chairperson Christo Wiese also launched a separate lawsuit of R59 billion last year to add to the company’s woes.  

PricewaterhouseCoopers, which was hired by Steinhoff to conduct a forensic investigation in the group, revealed this month that an estimated €6.5bn (R104bn) worth of fictitious transactions that took place between 2009 and 2017 had inflated the group’s profits and asset value. VEB and European investors, as a collective representative, has sued Steinhoff in the Dutch court for certain financial statements, prospectuses and press releases, which according to VEB are incorrect and misleading, the retailer said. 

In the meantime, Steinhoff saw the move as a breathing space to continue to put its finances in order. 

“The suspension will grant Steinhoff time to continue the ongoing restructuring of its business, make further progress with the internal investigations and finalise its 2017 and 2018 financial statements. 

“VEB and European investors agreed to the extension, because it further supports the stabilisation of the company, which is in the interest of both the current and former shareholders of Steinhoff,” the group said.

Steinhoff added that after the suspension VEB and Steinhoff were both free to continue the legal proceedings or to reach a settlement for affected shareholders through negotiations.

On Friday Steinhoff received support from the majority of its creditors.  

They agreed to extend the long stop date for restructuring of its finances to the end of May. The initial deadline set for the company voluntary arrangement long-stop date in relation to both Steinhoff Europe and Steinhoff Finance Holding was March 29. Steinhoff continues to monitor cash flows and manage other liabilities including contingent claims, tax and bilateral facilities as well as funding needs that may arise at the subsidiary level.

Steinhoff has been offloading non-core assets, which last week saw it sell its stake in KAP Industrial Holdings for $332 million and said it would sell its 74.9 percent stake in vehicle dealership Unitrans.


Share this article:

Related Articles