Steinhoff wins some support for credit extension

13 December 2017 - 08:31 By Jacqueline Poh, Ruth David and Loni Prinsloo
Steinhoff International Holdings Ltd
Steinhoff International Holdings Ltd
Image: Supplied

Steinhoff International Holdings has started to gain support from key lenders as it seeks extra time to repay more than 1-billion euros owed on a revolving credit facility, according to people familiar with the matter.

At least three of the embattled retailer’s biggest lenders have indicated to the company that they would support rolling over the debt, which is due in about three weeks, said the people, who asked not to be identified because the matter is private. The repayment extension, which needs support from a majority of lenders, will be discussed at a Dec. 19 meeting, the people said.

Steinhoff rattled creditors and investors last week by announcing accounting irregularities and the departure of its chief executive officer.The revelations have caused an about 75% slump in shares of the company, which ownsMattress Firm in the US, Poundland in the U.K. and the Pep clothing chain in Africa.

The retailer didn’t reply to a request for comment on the 2.9-billion euro revolving credit facility.

Most banks providing the facility, which matures in 2021, are yet to make a decision about the rollover request, the people said.

The top lenders in the facility include Bank of America Corp, BNP Paribas SA, China Construction Bank Corp, Citigroup, Commerzbank AG, Credit Agricole SA, HSBC Holdings, Mizuho Financial Group, Natixis SA and Royal Bank of Scotland Group, according to data compiled by Bloomberg.

As Steinhoff looks for ways to pay off debt, it will probably sell its holding in South African financial services company PSG Group Ltd., according to Jannie Mouton, chairman of PSG and a former Steinhoff director. Steinhoff holds almost a quarter of PSG’s stock and the stake’s value was about R14-billion by Tuesday’s close. Steinhoff said last week it was considering boosting liquidity by selling assets worth at least 1 billion euros.

- Bloomberg