Steinhoff progresses with settlement


Steinhoff progresses with settlement

Published Date: 2020-10-12 | Source: Stephen Gunnion | Author: Stephen Gunnion

Steinhoff progresses with settlement

The embattled retailer says the process has been more complex and time-consuming than expected.

Steinhoff International says it's on track with a proposed deal with litigants trying to sue the company for the accounting fraud that resulted in a precipitous decline in its share price almost three years ago. However, due to the number of parties involved across a number of countries, it says the process has been more complex and time-consuming than expected.

In July, the company proposed a $1 billion (R16.4 billion) settlement with shareholders who acquired shares in the market and also against contractual claims from businesses that were sold to Steinhoff in return for shares in the retailer. The company said about 90 separate legal proceedings had commenced against it and its subsidiaries in the Netherlands, Germany and South Africa. While all the claimants hadn't yet quantified their alleged damages, the combined claims of those that had came to more than $8.3 billion (R136 billion). Claims had also been made against former directors and management of its operations.

In an update on Friday, it said real progress had been made on clarifying key points and to continue the preparatory work necessary to implement the proposal and to settle the various claims against the company. It also launched a consent request to get the formal support of its financial creditors, which is required for the settlement to proceed. It recently applied to the Reserve Bank's Financial Surveillance Department for consent to the cross-border payments that would result from any settlement.

Steinhoff CEO and management board member Louis du Preez said sorting out the legacy claims against the company remained its top propriety and it was focused on securing the deal it had proposed.

Steinhoff's shares rose 2.7% to 75c on Friday.

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