Steinhoff CEO asks court to back R25 billion settlement as it seeks to postpone liquidation bid

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Steinhoff has applied to the Western Cape High Court to back its settlement plan.
Steinhoff has applied to the Western Cape High Court to back its settlement plan.
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  • After voting on its R25 billion settlement proposal ended last week, Steinhoff applied to the Western Cape High Court to have it sanctioned. 
  • In court documents, Steinhoff says that claimants "overwhelmingly' supported its plan. 
  • The group has also brought a new application to postpone the liquidation bid it is facing. 

Steinhoff has applied to the Western Cape High Court an urgent basis to approve its multibillion-rand settlement proposal, saying doing so will put an end to the "interminable" legal challenges it has been facing. 

"It is time for this saga to be brought to an end," the retailer's CEO Louis du Preez said in an affidavit. "The alternative is years of litigation at massive cost and prevailing uncertainty".

"The sanctioning of the proposal will go some way to restoring the tarnished reputation of SA Inc," he added, saying it would also help secure the jobs of more than 100 000 Steinhoff employees.   

The R25 billion question 

The settlement, first proposed by Steinhoff last year, entails paying out around R25 billion in compensation to claimants who lost out in the furniture retailer's dramatic share price plunge in late 2017.

In its court application, Steinhoff said that all three creditor classes in the South African and Dutch legs of the proceedings showed "overwhelming" support for the plan.

While the voting has concluded, the settlement will only become binding once it is approved by courts in South African and the Netherlands. 

According to Steinhoff, the process has to take place well before 31 March 2022, when the SA Reserve Bank's approval for it to send assets abroad ends. The retailer has said it may be forced into liquidation if the plan fails. 

As part of the proposed deal, litigants will be paid out a proportion of their verified claims. In return, they will have to drop all current and future legal challenges against the retailer.

The retailer on Monday also announced that "order to assist in the funding of the settlement" it had launched an accelerated bookbuild of up to 370 million ordinary shares in its South African subsidiary Pepkor Holdings.

Liquidation bid 

As Steinhoff seeks to hurry the settlement bid along, it is facing a separate liquidated bid which is set to be heard in the Western Cape High Court starting on Tuesday. 

On Monday, it announced that it had brought an application to postpone the hearing of the application. It has also asked to leave to appeal two previous rulings in the case. 

The winding-up application was brought by the former owners of shoe retailer Tekkie Town who say they were "duped" by Steinhoff's former CEO Markus Jooste into swapping their shares in the footwear chain for stock in Steinhoff.

Steinhoff has asked Judge Hayley Slingers to postpone the case to let it appeal an earlier ruling that found the court has jurisdiction to hear the case. But on Friday, Slingers dismissed the retailer's application for a delay.

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