STEINHOFF International Holdings (SIHPL) said it had reached agreement with Tekkie Town, and with Trevo Capital, two parties who had formerly opposed the global retail group’s R25 billion settlement proposals.
Steinoff, whose retail businesses include Pepkor Holdings, Mattress Firm and Greenlit Brands Group, hopes to settle some R136bn in legal claims against it which will allow it to focus on debt of about R151bn, and continue its recovery, since the accounting fraud in 2017 that led to losses of more than R200bn.
The group said in an update on Wednesday that it had received “overwhelming support” from the three classes of creditors in meetings held in September for the settlement proposals.
Steinhoff said Trevo Capital, which had opposed the proposals, announced on Wednesday however it supported the proposal, subject to certain conditions.
These conditions included that Ainsley Holdings, a Steinhoff indirect subsidiary, would grant to Trevo call options to purchase 120 million Pepkor Holdings shares exercisable in three years at an exercise price of R24.92215 per share,
The Trevo settlement would not impact the other scheme creditors, and financial creditor approval would be sought as soon as possible for the Trevo settlement proposal.
Louis du Preez, the CE, said “settlement with Trevo is another step towards conclusion of implementation of the Steinhoff global settlement. We continue to work towards satisfaction of the Trevo suspensive conditions and thereafter the approval of the proposal by the Western Cape Court in January 2022.”
Tekkie Town claimants had also opposed Steinhoff’s litigation settlement plan. Steinhoff said it had reached agreement with the former Tekkie Town owner claimants, who had instituted liquidation proceedings against Steinhoff in May this year.
While no decision had yet been taken by the court on the merits of the case, the court had granted Steinhoff and its financial creditors leave to appeal against a preliminary jurisdiction decision, and ordered the postponement of the liquidation application pending the outcome of that appeal.
However, on Wednesday, the former Tekkie Town owners agreed to withdraw their opposition to Steinhoff’s litigation settlement, while the claimants would be paid R500 million, and would also receive 29.5 million Pepkor Holdings shares, subject to various conditions.
Braam van Huyssteen, on behalf of the Former Tekkie Town Owner Claimants, said in a statement: “We are pleased to have reached terms with Steinhoff. We will be supporting Steinhoff to implement the settlement as soon as possible. We are satisfied with becoming a shareholder of Pepkor, and we are looking forward to concentrating on our businesses.”
Meanwhile, Steinhoff Investment Holdings said its revenue from continuing operations, comprising Pepkor Holdings only, increased by 9.2 percent to R77.3 billion for the year ending September 30, while operating profit (EBIT) from continuing operations, before other material expenses, increased by 30 percent to R8.6bn.
Prior year impairments of R11.4 billion were reversed, compared with only R3.9bn reversed in 2020. During the year the litigation proposal was increased from R9.4bn to R16.6bn, resulting in an additional net expense of R7.2bn.
Headline earnings per share improved from a loss of 12 483.0 cents to a profit of 11 843.6 cents. No dividend was declared on the ordinary shares.
BUSINESS REPORT ONLINE