European investors suspend class action against Steinhoff

European investors and Dutch group of investors VEB have agreed to suspend a class action suit against Steinhoff.

The retailer on Wednesday issued a notice to shareholders, indicating that the class action will be suspended until April 3, 2019.

"VEB/European Investors, as a collective representative, has sued Steinhoff in the Dutch court for certain financial statements, prospectuses and press releases, which according to VEB are incorrect and misleading.

"The suspension will grant Steinhoff time to continue the ongoing restructuring of its business and to make further progress with its investigations and the preparation of its financial statements," the notice read.

Danie van der Merwe, Steinhoff’s acting CEO said that the retailer is engaged in a "complex reorganisation as it restructures its financial liabilities and finalises investigations and financial statements. This agreement allows us time to focus on completing these tasks in the interests of all stakeholders.”

The suspension by VEB/European Investors will support the stabilsation of Steinhoff's business, the notice read.

"After the suspension, VEB/European Investors and Steinhoff are both free to continue the legal proceedings or to reach a settlement for affected shareholders through negotiations."

CEO of VEB/European Investors Paul Koster said in a statement that the group intends to "serve interests"of its institutional partners, private memebrs and investor community. 

Investors can still register to join the class action, the statement from VEB/European Investors read.

In August, chairperson of Steinhoff's supervisory board Heather Sonn told Parliament that the group is working on servicing its debt. At the time, the retailer had managed to reach a standstill agreement with banks for the next three years.

The share price which opened at R2.10 on Wednesday closed 4.29% weaker at R2.01.

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