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JOHANNESBURG, April 26 (Reuters) - South Africa’s Steinhoff has agreed to allocate 20% of the restructured company to shareholders under an updated plan backed by its creditors, it said on Wednesday, as the retail holding group races against time to avoid liquidation.
Its shares soared to close 20.83% up.
The furniture retailer, which has operations in Africa through Pepkor, Europe via Pepco and Australia, has been saying since last year it would not be able to settle its 10.2 billion euro ($11.26 billion) debt before it becomes due on June 30.
It asked its financial creditors to extend its debt maturity to June 30, 2026 through a proposed restructuring plan that it hopes will prevent a messy and drawn-out liquidation process if it is not accepted by creditors and shareholders.
But in March most shareholders rejected the plan that proposed handing 80% of the group’s equity to financial creditors and delisting Steinhoff’s parent company from the Johannesburg and Frankfurt stock exchanges, to create a new unlisted holding structure.
That forced Steinhoff to approach a Dutch court to oversee the proposed restructuring procedure. Under this process, it proposed that shareholders would not get any equity once the company delists and would not be paid out for the shares they own.
After consultations with stakeholders, financial creditors said they would support the proposed plan if Steinhoff gives shareholders rights to 20% of the company, Steinhoff said on Wednesday as it published the updated plan that now includes this allocation.
Under the plan, the contingent value rights (CVRs) of the company’s creditors and shareholders will be subject to the same terms and conditions, Steinhoff added.
The plan will now be voted on by the affected stakeholders from May 10 to May 23 and will become binding and effective if and when it is confirmed by the Dutch Court, Steinhoff said. ($1 = 0.9060 euros) (Reporting by Nqobile Dludla; Editing by Emelia Sithole-Matarise)
