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

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.


Trump calls for World Bank to stop lending to China

Updated 07 December 2019

Trump calls for World Bank to stop lending to China

WASHINGTON: US President Donald Trump on Friday called for the World Bank to stop giving loans to China, one day after the institution adopted a lending plan to Beijing over Washington’s objections.
The World Bank on Thursday adopted a plan to aid China with $1 billion to $1.5 billion in low-interest loans annually through June 2025. The plan calls for lending to “gradually decline” from the previous five-year average of $1.8 billion.
“Why is the World Bank loaning money to China? Can this be possible? China has plenty of money, and if they don’t, they create it. STOP!” Trump wrote in a post on Twitter.
Spokespeople for the White House and the World Bank did not immediately respond to requests for comment.
The World Bank loaned China $1.3 billion in the fiscal 2019 year, which ended on June 30, a decrease from around $2.4 billion in fiscal 2017.
But the fall in the World Bank’s loans to China is not swift enough for the Trump administration, which has argued that Beijing is too wealthy for international aid.