Steinhoff International Holdings NV has started to gain support from key lenders as it seeks extra time to repay more than €1bn ($1.2bn) 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 December 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 owns Mattress Firm in the US, Poundland in the UK and the Pep clothing chain in Africa.
The retailer didn’t reply to a request for comment on the €2.9bn 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 Inc, Commerzbank AG, Credit Agricole SA, HSBC Holdings, Mizuho Financial Group Inc, 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 14bn rand ($1bn) by Tuesday’s close. Steinhoff said on December 7 it was considering boosting liquidity by selling assets worth at least €1bn.
PSG chairman expects Steinhoff to sell stake in company
Steinhoff International Holdings NV will probably sell its stake in investment holding company PSG Group Ltd as the retailer looks for ways to pay off debt, according to Jannie Mouton, PSG’s chairman and a former Steinhoff director, Bloomberg reported.
“This is for me logic, they have a financial stress at Steinhoff,” Mouton said on Tuesday in an interview on Johannesburg-based Talk Radio 702. “PSG is a liquid asset. They have 25%, so for sure they’re going to sell that.”
PSG’s market value was 56bn rand ($4.1bn) by the close of trade in Johannesburg on Tuesday.
Steinhoff said on December 7 it was considering boosting liquidity by selling assets worth at least €1bn ($1.2bn). Steinhoff’s shares have fallen 74% in Johannesburg in the past week after the owner of Mattress Firm in the US and Poundland in the UK delayed publication of its financial results because of possible accounting irregularities that prompted the resignation of chief executive officer Markus Jooste.
Mouton resigned as a non-executive director of Steinhoff in May 2016 and sold all his shares in the company soon thereafter. The proceeds were used to settle debt and for his charitable foundation, Stellenbosch, Western Cape-based PSG said earlier on Tuesday.
A pedestrian pushes a baby stroller past a PEP store, operated by Pepkor, a unit of Steinhoff International Holdings in Johannesburg. Steinhoff rattled creditors and investors last week by announcing accounting irregularities and the departure of its chief executive officer.
