File image: IOL.

JOHANNESBURG - Retail company Steinhoff International Holdings N.V. said on Thursday it had obtained creditor support letters for its subsidiaries Steinhoff Europe AG (SEAG) Steinhoff Finance Holding to implement stabilisation measures.

The group, still grappling with the fallout from revelations of accounting irregularities last December, has been in discussions in London with creditors of the subsidiaries to implement stabilisation measures designed to alleviate going concern risks under applicable Austrian laws.

"Formal letters of support to SEAG and Holding respectively have come into effect today," the company said on Thursday.

It said this was with the support of creditors representing approximately 61 percent of the external financial indebtedness of SEAG, holders representing a majority of the total convertible bonds issued by Holding and group companies to which SEAG and Holding were indebted.

The support letters underlined the support of creditors to the group’s efforts to agree and implement a restructuring plan.

In addition, creditors have agreed to subordinate in aggregate up to approximately €89 million and €65 million of their contractual rights against SEAG and Holding respectively.

Steinhoff said it continued to negotiate with its financial creditors and other stakeholders regarding the restructuring of the group’s indebtedness.

"This will represent a step towards creating stability for our operating companies, and greater certainty for our employees and suppliers," it said.

Steinhoff International is a South African international retail holding company that is dual listed in Germany and deals mainly in furniture and household goods, with operations in Europe, Africa, Asia, the United States, Australia and New Zealand.

Its former CEO Markus Jooste resigned in December as the company admitted to "accounting irregularities" in what some have called the biggest corporate scandal in South African history.

The scandal triggered a heavy run on Steinhoff's shares, shaving off billions of rand from its value.

- African News Agency (ANA)