Steinhoff bondholders said to offer loan as part of bankruptcy filing

A group of Steinhoff International Holdings [JSE:SNH] bondholders may inject about $300m (about R4.4bn) into the retailer’s troubled US bedding unit Mattress Firm as part of a bankruptcy filing, according to people familiar with the matter.

The range offered for the loan may be as low as $250m (about R3.7bn) or more than $350m (about R5.2bn), according to the people, who asked not to be identified because the negotiations are private. The move is part of Mattress Firm’s plans to file for bankruptcy, with this expected soon, one person said.

Steinhoff last month said it was assessing ways to attract extra funding for Mattress Firm to execute a turnaround. A spokesman for the company declined to comment beyond what the company presented in a September 20 lenders presentation. The payment-in-kind note will carry a 12% interest rate, one of the people said.

Mattress Firm needs “incremental liquidity” for its recovery to be secured, Steinhoff said in the presentation to creditors. Bought for $3.8bn (about R56bn) two years ago, Mattress Firm has emerged as a headache for Steinhoff as it strives to shore up liquidity following an accounting scandal.

The 3 300-store chain expanded too aggressively, suffered from ineffective marketing and has been embroiled in a dispute with suppliers, Steinhoff said.

The bedding company has hired restructuring advisers including AlixPartners and Guggenheim Securities, along with law firm Sidley Austin. The Wall Street Journal reported the loan earlier.

ZAR/USD
16.76
(-0.05)
ZAR/GBP
21.18
(-0.23)
ZAR/EUR
18.94
(-0.09)
ZAR/AUD
11.65
(-0.04)
ZAR/JPY
0.16
(+0.04)
Gold
1798.11
(+0.03)
Silver
18.69
(+0.17)
Platinum
824.50
(+0.30)
Brent Crude
43.14
(+2.10)
Palladium
1961.36
(+0.61)
All Share
55417.89
(-0.66)
Top 40
51154.08
(-0.74)
Financial 15
10472.31
(+1.28)
Industrial 25
76134.69
(-1.67)
Resource 10
52483.78
(-0.20)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 1968 votes
I am taking a hit, but should be able to recover in the next year
23% - 2578 votes
My finances have been devastated
34% - 3826 votes
It's still too early to know what the full effect will be
25% - 2757 votes
Vote