LONDON (LPC) - Troubled retailer Steinhoff (SNHJ.J) said it is seeking a further three week standstill from creditors on its debt obligations as a financial restructuring nears agreement.
Earlier this month letters of support were agreed with several creditor groups, including a group representing 61% of the external financial indebtedness of Steinhoff Europe AG (SEAG), a majority of the total convertible bonds issued by Steinhoff Financial Holding Co (Holding) and creditors to certain group companies to which SEAG and Holding are indebted through intra-group financing arrangements.
Under the terms of the support letters, the creditors agreed to provide SEAG and Holding with a number of interim support measures — including a debt standstill — until June 30 in an attempt to stabilize the financial position of SEAG and Holding and to provide Steinhoff and its creditors with sufficient time to agree a restructuring plan.
The company is now seeking a further short extension until and including July 20, Steinhoff said in a statement on Wednesday, confirming an earlier report from Thomson Reuters LPC.
“We expect to get 75% of creditors locked into an agreement in due course - this is just a short extension to get to that point. Everyone is working hard it is just so complicated,” one source close to the situation.
A second source said: “The extension is just a technical matter. People know they are running out of time and are discussing in a constructive manner.”
In the statement, Steinhoff said that its final term sheet for the restructuring has been shared with the creditor groups and that significant progress has been made, but more time was needed.
Creditors now have until 8AM GMT on Friday June 29 to agree to the extension of the support letters.
Under the terms of the restructuring plan laid out so far all debt will be reinstated at par and will be given a common maturity date of three years from completion of a restructuring agreement.
Steinhoff is fighting for survival after discovering accounting irregularities last December that triggered an 85% share price slide in the group and a raft of changes in its boardroom and leadership.
Editing by Christopher Mangham