Steinhoff International Holdings chairman, Christo Wiese, seeking to stabilise the embattled retailer, is negotiating a standstill agreement on a \u20ac1.5 billion (R24.18 billion) margin loan under which banks would suspend the sale of stock until next year, according to people with knowledge of the discussions.<\/p>\n
The owner of Mattress Firm in the US and Poundland in the UK needs a lifeline after its stock plunged last week when it delayed publication of its financial results because of possible accounting irregularities that prompted the resignation of its chief executive officer.<\/p>\n
Wiese, a South African billionaire who\u2019s Steinhoff\u2019s biggest shareholder, is stepping up efforts to save the company, which owes creditors as much as $21 billion. The shares rebounded slightly early Monday after Steinhoff said it appointed Moelis & Co to handle discussions with lenders and AlixPartners LLP to advise on \u201cliquidity management and operational measures.\u201d<\/p>\n
Last year, Wiese pledged 628 million of Steinhoff\u2019s shares in collateral to borrow money from Citigroup Inc, HSBC Holdings Plc and Nomura Holdings Inc. That was to participate in a share sale in conjunction with Steinhoff\u2019s acquisition of Mattress Firm and Poundland, according to a company statement.<\/p>\n
The banks are considering waiting until the publication of Steinhoff\u2019s audited results, said the people, who asked not to be identified because the plan is confidential. An accord could come as early as this week, the people said. A spokesperson for Wiese declined to comment.<\/p>\n
The retailer \u201cis currently fully focused on safeguarding operational liquidity to continue funding existing operations throughout its various subsidiaries,\u201d Steinhoff said in a statement late Sunday.\u201cThe group is asking for and requires continued support in relation to existing facilities.”<\/p>\n
Shares in South African retailer Steinhoff jumped as much as 40% on Monday, regaining some ground after calling on its lenders to help stabilise the company following the discovery of accounting irregularities last week.<\/p>\n
By 08:22 GMT (11:19 SAST), the stock was up 40% at R8.39 in Johannesburg, recouping some of the $14 billion of shareholder value wiped off since last Wednesday when it ordered an investigation into its accounts and said it had parted ways with its veteran chief executive.<\/p>\n
With additional reporting from Reuters<\/a><\/strong>.<\/em><\/p>\n
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