Approval of R25 billion settlement a 'big milestone' for Steinhoff, says CEO

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Steinhoff CEO Louis du Preez.
Steinhoff CEO Louis du Preez.
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  • Steinhoff's CEO has welcomed a decision by the Western Cape High Court to approve its multibillion-rand financial settlement with claimants. 
  • The court ruled that Steinhoff fulfilled all the terms of the settlement, which will see it pay out around R25 billion to those who lost out in its share price plunge. 
  • Chief executive officer Louis du Preez says the retailer will now be able to shift more focus onto the third and final step of its restructuring plan. 

Steinhoff's CEO Louis du Preez has described a decision by the Western Cape High Court to approve the retailer's settlement proposal as a "big milestone" in its restructuring process. 

On Monday, Judge Rosheni Allie condoned Steinhoff's multibillion-rand settlement with claimants. 

The decision means that if no appeals are lodged before 15 February, the €1.43 billion (~R25 billion) settlement will become binding on all claimants.  

The settlement governs how tens of thousands of investors who lost out in Steinhoff's precipitous share plunge in late 2017 will be financially compensated. Litigants will share a "pot" of about €1.43 billion, with payouts differing according to which class they belong to. 

As part of the deal, claimants will have to drop all current and future legal actions against the retailer. 

'Best outcome'

"This is a big milestone in our three-step plan," said Du Preez.  

"We have maintained throughout that this is the best outcome for all the stakeholders.

"Our immediate attention will now be on implementation of the settlement and medium- and longer-term focus on step three of the restructuring plan."

Steinhoff's three-step plan refers to the retailer's blueprint to restructure and rebuild its business in the wake of the accounting scandal that broke in late 2017.

Steps one and two encompassed making deals with creditors to delay repayments and "managing litigation risk" so that court cases do not force it out of business. 

Step three of the plan, meanwhile, refers to restructuring the group to reduce debt and high financing costs.

The Public Investment Corporation on Tuesday said the approval of the settlement agreement was a "positive step for those invested in Steinhoff".

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