Wiese steps up efforts to save Steinhoff, seeks standstill on loan

London - Steinhoff International Holdings Chairperson Christo Wiese, seeking to stabilise the embattled retailer, is negotiating a standstill agreement on a €1.5bn (R24bn) margin loan under which banks would suspend the sale of stock until next year, according to people with knowledge of the discussions.

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.

Wiese, a South African billionaire who’s Steinhoff’s biggest shareholder, is stepping up efforts to save the company, which owes creditors as much as $21bn (R287bn). The shares rebounded slightly early on Monday after Steinhoff said it appointed Moelis & Co to handle discussions with lenders and AlixPartners LLP to advise on “liquidity management and operational measures”.

Last year, Wiese pledged 628 million of Steinhoff’s shares in collateral to borrow money from Citigroup, HSBC Holdings and Nomura Holdings. That was to participate in a share sale in conjunction with Steinhoff’s acquisition of Mattress Firm and Poundland, according to a company statement.

The banks are considering waiting until the publication of Steinhoff’s 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.

The retailer “is currently fully focused on safeguarding operational liquidity to continue funding existing operations throughout its various subsidiaries,” Steinhoff said in a statement late on Sunday. “The group is asking for and requires continued support in relation to existing facilities."

Lenders’ meeting

On Friday, after staying silent for much of the week as its shares and its bonds plunged, Steinhoff postponed by a week a crucial meeting with lenders that was set for Monday. Investec said on Monday that it has credit and derivative exposure to Steinhoff, without specifying the amount.

Steinhoff’s shares were up as much as 24% in early trading in Frankfurt, where the company has its primary listing. Last week’s freefall wiped out a majority of the net worth of Wiese and an investment by the Public Investment Corporation, which manages the pension funds of South African government workers.

The company had been on an acquisition spree since Wiese bought into the company via the sale of his African chain of Pep stores in 2014. Wiese, 76, is now valued at $1.8bn (R24.59bn), compared with $4.4bn (R60.1bn) on Tuesday, according to the Bloomberg Billionaires Index.

* SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
16.48
-0.2%
Rand - Pound
19.85
-0.1%
Rand - Euro
16.72
-0.1%
Rand - Aus dollar
11.55
-0.0%
Rand - Yen
0.12
+0.1%
Gold
1,778.11
-0.1%
Silver
20.15
-0.6%
Palladium
2,132.50
-0.9%
Platinum
930.00
-0.9%
Brent Crude
95.10
-3.2%
Top 40
64,427
+0.6%
All Share
71,133
+0.6%
Resource 10
64,622
+2.1%
Industrial 25
86,896
-0.1%
Financial 15
16,190
+0.2%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders