CAPE TOWN - Steinhoff International Holdings yesterday launched a consent process for a lockup agreement in connection with the restructuring of the company’s financial indebtedness set to be in place for at least three years.
This marked the culmination of several weeks of discussions with the ad hoc committees of third-party creditors of Steinhoff Europe AG (Seag), Stripes US Holding Incorporated and Finance Holding and the co-ordinating committee in respect of the group’s European creditors.
It represents an important step in the restructuring process.
The company said yesterday that once the lock-up agreement became effective in accordance with its terms, the creditors and the company would seek to implement the restructuring within three months.
Since Steinhoff revealed accounting irregularities in December and the company, with €9.4 billion (R147.55bn) of debt, has been faced with insolvency issues.
The lock-up agreement, among other matters, imposes agreed limited recourse and standstill obligations on relevant internal and external creditors to facilitate the implementation of the restructuring by providing the group and its stakeholders with a period of stability while the relevant documents are negotiated, and arrangements put in place to effect the restructuring.
Steinhoff said if sufficient creditor support for the lock-up agreement was not obtained and the lock-up agreement did not become effective in accordance with its terms by July 20, the boards of Seag and Finance Holding would need to assess their options and obligations.
The company established a governance working group from certain creditor representatives to work alongside its nominations committee to consult on matters including changes that could be introduced to the composition of the supervisory board and the management board.
“The search for new candidates for the company’s boards shall be led by the nominations committee in consultation with the governance working group and a shareholders’ meeting will be convened in due course to seek approval from shareholders for the appointment of any suitable candidates identified through the search process,” Steinhoff said in a statement.
In addition, a litigation committee will be established by each of the company’s boards to oversee material litigation claims in respect of the group.