Scandal-hit Steinhoff has published an update to its restructuring plans, trying to rope its European creditors into signing on by offering an ‘early bird’ fee in a lock-up agreement.
According to a notice published on the JSE’s SENS news service on Wednesday, the update is a confirmation of the extension request, where it asked creditors of Steinhoff Europe AG and Steinhoff Finance Holding to hold off calling in debts until 20 July 2018.
The group is now asking these creditors to sign on to its restructuring plan for the European business, which, if accepted, will be implemented within the next three months and go on for three years.
Creditors that consent to the plan before 16 July will be eligible for an ‘early bird fee’ equal to their pro-rata share of 0.5% of all locked-up Steinhoff Europe debt, and 0.85% of all locked-up Steinhoff Finance Holding debt, the group said.
This is on top of the standard lock-up fee of 0.5% and 0.15% for the respective companies, according to Steinhoff.
Both of these are subject to conditions – specifically, Steinhoff needs an 85% majority of creditors to sign on to the plan for it to proceed. It needs to secure creditor support for the plan by July 20, the company said, or else it will have to ‘consider its options’, which could include reorganising the entire business.
Steinhoff has been on the brink of insolvency after revealing accounting irregularities in December. The company has about 9.4 billion euros of debt, and last month said it had written off the value of assets by 12.4 billion euros as part of an investigation by auditors at PwC.
The group’s shares extended gains Wednesday, climbing as much as 9.2% in Frankfurt after the announcement, and jumped as much as 16% on JSE to over R2.00 a share. The stock is down 96% since the crisis erupted.