Steinhoff Wins Creditor Support for Debt Restructuring Plan

(Bloomberg) -- Steinhoff International Holdings NV won support from a majority of creditors to restructure its 9.4 billion euros ($11 billion) of debt, seen by the embattled retailer as a vital step toward its recovery from an accounting scandal.

The owner of Conforama in France and Mattress Firm in the U.S. sought a three-year extension to payments due to lenders and bondholders as the South African company repairs its balance sheet. About 89 percent of holders of debt in Steinhoff Europe AG agreed to the terms and the retailer will seek to wrap up the plan by the Friday deadline, according to a Thursday statement.

The shares gained 17 percent to 0.23 euros as of 4:57 p.m. in Frankfurt, where the company moved its primary listing from Johannesburg in 2015. The stock has shed 93 percent of its value since late last year, when Steinhoff reported financial irregularities and Chief Executive Officer Markus Jooste quit.

Between 92 percent and 99 percent of holders of convertible bonds due 2021, 2022 and 2023 issued out of Steinhoff Finance Holding GmbH backed the plan, while holders of 89 percent of Stripes US Holding Inc. debt signed the agreement.

The company still needs to complete final steps before the lock-up agreement with creditors becomes effective, Steinhoff said.

‘Going Concern’

One of the conditions is that directors of its Austrian units Finance Holding GmbH and Europe AG must establish a “positive going concern,” it said in a statement last week. If the agreement fails to come into force by Friday, the boards of the subsidiaries “will need to assess their options, including local reorganization procedures, and obligations under the applicable Austrian law,” the company said.

The German-listed retailer also set out the terms of a restructuring of its real estate arm’s 750 million euros of loans maturing Aug. 3. Steinhoff wants lenders to roll over into a new three-year senior secured facility offering a 10 percent interest rate, payable in cash or with more debt, it said in a separate statement on Thursday.

Hemisphere will need to agree an asset disposal plan with lenders within three months of the restructuring, Steinhoff said.

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