Steinhoff Gets Standstill Backing From More Than 75% Bondholders

JOHANNESBURG (Capital Markets in Africa) – Steinhoff International Holdings NV won backing for a standstill on its debt from more than 75 percent of its convertible bondholders, a significant step toward reaching a restructuring deal.

The beleaguered South African retailer said it has sufficient support from holders of each of the three convertible bonds issued out of its Austrian unit Steinhoff Finance Holding GmbH. Those are worth a combined 2.7 billion euros ($3.2 billion). The company can now start a consent solicitation process to change the terms on the notes, according to astatement on Tuesday.

The winning of creditor support comes amid constant talks with lenders about how the owner of Conforama in France and Mattress Firm in the U.S. can manage its debt, crucial to its survival after reporting accounting irregularities late last year. The stock has crashed more than 97 percent since then, and Steinhoff is working toward a target of releasing audited results by the end of the year.

The standstill request is still pending for the 5.4 billion euros of creditors to Steinhoff Europe AG, which can earn a consent fee if they sign up by June 15, the company said. Steinhoff said last week that a majority of the creditors of the two units had provisionally agreed on the standstill.

Steinhoff, which wants to extend most of its debt maturities for three years without cash interest payments, may be able to launch a comprehensive restructuring plan before the end of the month.

Banks and investment funds are bundled in three different groups, represented by financial advisers FTI Consulting, Houlihan Lokey Inc., and PJT Partners Inc. The company plans to publish its three-month trading update this month.

Source: Bloomberg Business News