DURBAN - STEINHOFF International said yesterday that it had received overwhelming support from its creditors on the proposal to settle legacy litigation and various claims against it following the December 2017 accounting scandal that almost brought the retailer to its knees.
Steinhoff said it achieved unanimous support from lenders across the Hemisphere and Seag facilities, other than the Seag Facility A2 Creditors, where Steinhoff obtained the support of 93 percent by value.
“For the SFH facilities, Steinhoff obtained the support of between 94 and 96 percent by value,” the group said.
It said the sole dissenting institution is affiliated with an entity that is currently engaged in a dispute on the terms of the proposed settlement.
It said due to the sole dissenting institution voting against the consent request, it was unable to obtain 100 percent support from the Seag Facility A2 Creditors under the Seag contingent payment undertaking (CPU).
Steinhoff said it now intended to pursue an English law scheme of arrangement to obtain the necessary approval of its creditors under the Seag CPU.
Chief executive Louis du Preez said while strong support for the consent request was received in all creditor classes with one institution voting against, he anticipated that the 100 percent consent threshold for certain instruments could pose a significant challenge in obtaining the required support in respect of those instruments.
“This is particularly the case given the large and disparate lender groups involved,” Du Preez said. “For this reason, at the start of the consent request process we retained the option of using an alternative, English law scheme of arrangement, which has a lower consent threshold, in order to implement the amendments required to pursue the proposed settlement.”
Du Preez said the group would now take that route for the Seag CPU, in which they did not obtain the requisite consents. He said the group recognised this would take longer to complete.
In July Steinhoff said it was engaged in active discussions with litigants, their legal representatives, creditors and other relevant parties for a proposal of R16.5 billion to settle past legal disputes arising from the December 2017 accounting scandal.
Du Preez emphasised yesterday that settlement of the legacy legal claims against Steinhoff remains their top priority and real progress is being made. “We are confident that the proposed settlement is in the best interests of all stakeholders and remain fully focused on securing the route towards its implementation,” he said.
Steinhoff said it anticipated launching the Seag CPU scheme with the issuance of a practice statement letter to participating creditors in the next few days.
The group said it also planned to convene a scheme hearing this month followed by a meeting of participating creditors in mid-December and in late January.
Steinhoff shares declined 4.55 percent on the JSE to close at R0.84.
BUSINESS REPORT