Steinhoff International Holdings, a South African retail conglomerate linked to billionaire retail magnate Christo Wiese, has successfully concluded a comprehensive and conclusive agreement with LSW for €202.12 million ($214.1 million).
The South African retail conglomerate said the agreement would put an end to all outstanding litigation with LSW, an Austrian firm linked to Andreas Seifert, a former business associate who feuded with the group’s ex-CEO Markus Jooste.
The mysterious LSW litigation, which now requires a total settlement amount of $214.1 million, is related to Conforama, a European home decor retail chain in which Steinhoff invested in 2011.
Steinhoff has been struggling financially since the 2017 accounting scandal, which resulted in the resignations of CEO Markus Jooste and South African billionaire Christo Wiese.
The company has been working to recover from the crisis and reduce debt, with CEO Louis du Preez leading the efforts to rebuild the company.
Despite previous management optimism, it is becoming clear that Steinhoff’s underlying operating companies are not performing as well as expected, resulting in dwindling hope that it will generate enough cash flows to offset its corporate debt.
The retail conglomerate reached an agreement with its largest creditors earlier this year to extend the maturity of its debt from June 30, 2023, to at least June 30, 2026.
The board of directors stated that this extension will provide a good platform for reducing debt and financing costs in the aftermath of the company’s 2017 accounting scandal, which resulted in approximately 90 separate legal claims against the company.
Despite the impact of the decade-long financial crisis on the company’s share price, which has fallen from R95 ($5.2) to R0.3 ($0.0164) in the past 10 years, Wiese, Steinhoff’s largest shareholder in 2017, is back as a billionaire after losing nearly $1 billion due to the retailer’s share price crash.
Wiese’s net worth is now estimated at $1.1 billion, ranking him 19th on Forbes Africa’s Billionaires list.
