South African retail company, Steinhoff International Holdings linked to billionaire Christo Wiese, is seeking approval from a Dutch court for a comprehensive debt restructuring plan as it looks to rejuvenate its struggling operations and regain financial stability.
Despite facing resistance from shareholders, the move marks a significant milestone in the retailer’s journey toward recovery. Steinhoff’s creditors have already given the green light to its debt restructuring plans, paving the way for the company to seek the Dutch court’s endorsement.
The debt restructuring plan which is expected to strengthen the Christo Wiese-linked retailer includes an extension of the maturity date for the company’s “group services debt” from June 30, 2023, to at least June 30, 2026.
Notably, all three classes of creditors, including the conditional payment undertaking, secured, and unsecured creditors, have unanimously supported the restructuring plan. This resounding backing reflects confidence in Steinhoff‘s future prospects and highlights faith in the proposed transformation.
Pending approval from the Dutch court, the restructuring plan also involves the delisting of the parent company, leading to the creation of an innovative unlisted holding structure.
Under the proposed plan, shareholders will be granted rights to a 20-percent stake in the new entity. This stake can potentially be converted into monetary value if Steinhoff successfully pays off its debt and achieves profitability in the future.
However, despite the company’s challenging situation, with liabilities surpassing assets and an impending $11.15-billion external debt maturity by the end of June, only a small fraction of shareholders, about one-tenth, approved the restructuring plan.
Steinhoff’s journey to recovery remains uncertain, but the recent filing for Dutch court approval represents a significant step forward. If granted, the endorsement would provide a crucial lifeline for the retail giant, increasing hope for its revival and offering potential value to shareholders in the future.