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JOHANNESBURG (Reuters) - South African retailer Steinhoff International has started a series of payouts to shareholders who lost money when its stock plunged after the revealing of accounting fraud in December 2017, it said on Tuesday.
The implementation of its 1.43 billion euro ($1.62 billion) settlement offer will finally remove the single most significant overhang for the company, enabling it to focus on reducing debts and on the continued recovery from the fraud scandal.
Shares of the company, majority owner of Pepkor in Africa and Pepco in Europe, closed 4.3% higher.
The retailer had faced 90 separate legal claims in Germany, South Africa and the Netherlands, and to avoid lengthy and expensive multi-jurisdictional legal battles it had proposed the offer, which in September received approval from claimants and financial creditors, and recently courts.
In an update to shareholders, Steinhoff said that Tuesday was the “settlement effective date” for the offer, meaning it can start making payments. It said pending legal proceedings, including a liquidation petition, will be withdrawn.
The retailer said it had paid the settlement funds to a body called Stichting Steinhoff Recovery Foundation, set up to administer the distribution of funds to claimants after May 15.
It has also made cash payments and initiated the transfer of Pepkor shares to certain contractual claimants or those parties who sold their businesses to Steinhoff in exchange for shares, Steinhoff said, adding that further steps of the settlement will be taken in the coming weeks and months.
($1 = 0.8807 euros)
