Steinhoff’s overseas business restructures debt after scandal

Steinhoff CEO Louis du Preez says the company remains committed to improving performance. (Reuters)
Updated 14 August 2019
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Steinhoff’s overseas business restructures debt after scandal

  • A CVA is a UK legal process that allows a company with debt problems to reach a voluntary agreement with creditors over the payment of its debts while continuing to trade

JOHANNESBURG: Scandal-hit Steinhoff said it had refinanced some €9 billion ($10 billion) of debt in its overseas operations which include brands such as Poundland in the UK and France’s Conforama, after pushing the deadline date back repeatedly.

“Implementation of the restructuring is a major milestone on our recovery journey, bringing with it the stability that will allow us to turn the page and concentrate fully on maximising value from our operating companies,” Group Chief Executive Louis du Preez said in a statement.

“The company remains committed to improving the performance of its operational businesses across the group, reducing its debt, resolving the legal claims against it and delivering value for its stakeholders.”

Du Preez on Tuesday delivered a stark assessment of Steinhoff’s options at the South African company's first public investor presentation since a $7 billion accounting fraud scandal broke, saying its only hope for survival is to sell off assets to become a retail-focused holding company.

Shares in Steinhoff jumped 4.84 percent to 1.30 rand in early trading.

Established more than 50 years ago, the firm expanded from a small South African outfit to a furniture and household goods retailer straddling four continents before it shocked investors by flagging holes in its accounts in 2017.

Its Steinhoff Europe AG (SEAG) and Steinhoff Finance Holding GmbH (SFHG) operations had entered into a company voluntary arrangement (CVA) with its creditors last year.

SEAG’s €5.6 billion of debt, plus around €2.8 billion from SFHG and a further €400,000 from another business has been reissued with maturities from Dec. 2021 and no cash interest payments.

The company is now up to date with its financial reporting and expects to publish an unaudited quarterly update for the three months ended June 30 2019 on August 29, it said on Wednesday.


Electric luxury vehicles, SUVs ‘more likely to cause accidents’

Updated 23 August 2019
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Electric luxury vehicles, SUVs ‘more likely to cause accidents’

  • As EV sales rise, French insurer AXA warns that drivers are struggling to adapt to cars’ rapid acceleration

LONDON: Electric luxury cars and sport utility vehicles (SUVs) may be 40 percent more likely to cause accidents than their standard engine counterparts, possibly because drivers are still getting used to their quick acceleration, French insurer AXA said.

The numbers, based on initial trends from claims data and not statistically significant, also suggest small and micro electric cars are slightly less likely to cause accidents than their combustion engine counterparts, AXA said at a crash test demonstration on Thursday.

AXA regularly carries out crash tests for vehicles. This year’s tests, which took place at a disused airport, focused on electric cars.

Overall accident rates for electric vehicles are about the same as for regular cars, according to liability insurance claims data for “7,000 year risks” — on 1,000 autos on the road for seven years — said Bettina Zahnd, head of accident research and prevention at AXA Switzerland.

“We saw that in the micro and small-car classes slightly fewer accidents are caused by electric autos. If you look at the luxury and SUV classes, however, we see 40 percent more accidents with electric vehicles,” Zahnd said.

“We, of course, have thought about what causes this and acceleration is certainly a topic.”

Electric cars accelerate not only quickly, but also equally strongly no matter how high the revolutions per minute, which means drivers can find themselves going faster than they intended.

FASTFACT

Accident rates among luxury and SUV electric vehicles are 40 percent higher than for their combustion engine counterparts.

Half of electric car drivers in a survey this year by AXA had to adjust their driving to reflect the new acceleration and braking characteristics.

“Maximum acceleration is available immediately, while it takes a moment for internal combustion engines with even strong horsepower to reach maximum acceleration. That places new demands on drivers,” Zahnd said.

Sales of electric cars are on the rise as charging infrastructure improves and prices come down.

Electric vehicles accounted for less than 1 percent of cars on the road in Switzerland and Germany last year, but made up 1.8 percent of Swiss new car sales, or 6.6 percent including hybrids, AXA said.

Accidents with electric cars are just about as dangerous for people inside as with standard vehicles, AXA said. The cars are subject to the same tests and have the same passive safety features such as airbags and seatbelts.

But another AXA survey showed most people do not know how to react if they come across an electric vehicle crash scene.

While most factors are the same — securing the scene, alerting rescue teams and providing first aid — it said helpers should also try to ensure the electric motor is turned off. This is particularly important because unlike an internal combustion engine the motor makes no noise. In serious crashes, electric autos’ high-voltage power plants automatically shut down, AXA noted, but damaged batteries can catch fire up to 48 hours after a crash, making it more difficult to deal with the aftermath of
an accident.

For one head-on crash test on Thursday, AXA teams removed an electric car’s batteries to reduce the risk of them catching fire, which could create intense heat and toxic fumes.

Zahnd said that studies in Europe had not replicated US findings that silent electric vehicles are as much as two-thirds more likely to cause accidents with pedestrians or cyclists.

She said the jury was still out on how crash data would affect the cost of insuring electric versus standard vehicles, noting this always reflected factors around both driver and car.

“If I look around Switzerland, there are lots of insurers that even give discounts for electric autos because one would like to promote electric cars,” she said.