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Steinhoff surges on JSE after offering to pay out extra R3bn

Steinhoff International Holdings’s shares leapt by a whopping 30 percent on the JSE yesterday as subsidiary, Steinhoff International Holdings Limited (SIHL), proposed making an additional R3 billion payment for investors who suffered losses due to its accounting scandal of 2017. Picture: Henk Kruger/African News Agency/(ANA).

Steinhoff International Holdings’s shares leapt by a whopping 30 percent on the JSE yesterday as subsidiary, Steinhoff International Holdings Limited (SIHL), proposed making an additional R3 billion payment for investors who suffered losses due to its accounting scandal of 2017. Picture: Henk Kruger/African News Agency/(ANA).

Published Aug 12, 2021

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STEINHOFF International Holdings’s shares leapt by a whopping 30 percent on the JSE yesterday as subsidiary and global furniture retailer, Steinhoff International Holdings Limited (SIHL), proposed making an additional R3 billion payment for investors who suffered losses due to its accounting scandal of 2017.

The share closed the day 23.21 percent higher at R2.07.

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Steinhoff International, which has faced numerous claims in South Africa and Europe after admitting to “cooking the books” in 2017, said the proposed additional payment had received the green light from active claimant group, Hamilton.

“Steinhoff has received confirmation that the active claimant group, Hamilton, supports in principle the Steinhoff global settlement based on this increased contribution by SIHPL. SIHPL has also received confirmation that four large Steinhoff financial creditors will support the revised proposal,” said Steinhoff.

Dublin-based Hamilton was seeking around R14bn claims against Steinhoff following the December 2017 admission to accounting irregularities. Hamilton had sued Steinhoff on behalf of its clients including Investec, Coronation and Allan Gray.

Steinhoff International said Stellenbosch head-quartered SIHPL was subject to various legal disputes arising from the 2019 financial restructuring process and the settlement implementation arrangements in addition to those disputes arising from the earlier legacy accounting issues.

“Recognising that the recent disputes focus on the proposed SIHPL settlement arrangements, Steinhoff has given consideration to whether a further and final increase to the SIHPL settlement offer to the SIHPL market purchase claimants can be made in order to achieve the necessary levels of support for the global litigation settlement proposal,” said the group.

The claims relate to the accounting scandal of December 2017 which resulted in the Steinhoff share price shedding 95 percent and the group losing more than R200 billion in market capitalisation. The scandal led to the resignation of Steinhoff’s flashy chief executive Markus Jooste.

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Yesterday’s R3.2bn sweetener brings the settlement offer to €1.4bn after Steinhoff originally offered €943 million (R15.96bn) last year to settle legacy claims against it and hiked the settlement by 28 percent to €1.2bn last month.

The Steinhoff global settlement proposal is implemented under the Dutch suspension of payments (SoP) which commenced in February and the Section 155 proposal under South African law.

Steinhoff said separately, SIHPL concluded to amend the SIHPL Section 155 proposal to provide that Mauritius-based Trevo Capital would be treated as a non-qualifying claimant, instead of as an SIHPL market purchase claimant as previously proposed.

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“Steinhoff believes that this approach removes Trevo’s legal standing in the Section 155 proposal, and provides a basis for the discontinuance of Trevo’s further participation in the class composition application that has been brought in the Cape Town High Court, the hearing of which is currently adjourned to August 13 (tomorrow),” said Steinhoff.

Last month the Western Cape High Court ruled in favour of Trevo Capital and declared that the troubled retailer had violated the Companies Act in 2019, an outcome that could affect the payouts and settlements to other claimants.

Trevo sued Steinhoff for around R2.1bn as a result of losses suffered from the fall in the share price.

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