"June 15 6:49 PM
Steinhoff shareholders clash with creditors over debt agreement
Carl Grol
In brief
-Steinhoff almost capsized at the end of 2017 after an accounting scandal.
-The conglomerate has a debt of more than € 10 billion.
-Creditors want an agreement and then get their hands on the company.
-A group of German shareholders is staunchly against.
They were diametrically opposed to each other, the shareholders and creditors of Steinhoff. The South African conglomerate must repay billions at the end of this month, but does not have that money. That is why the creditors want to enforce a restructuring before the court in Amsterdam. To the dissatisfaction of shareholders.
On Thursday, a session was held in the context of the Homologation Private Agreement Act. This law regulates an agreement between the debtor and the creditors under the supervision of the court, without bankruptcy following. Not all creditors have to agree to this. Because Steinhoff is a Dutch NV, the hearing took place at the Zuidas.
Lawyer Paul Kuipers of Linklaters, who represents Steinhoff, criticized SDK in particular. This is the German counterpart of investor association VEB.
Kuipers recently said that SDK represents an interest of 'six digits after the decimal point'. Steinhoff is listed in Frankfurt and Johannesburg, and has more than four billion shares outstanding. SDK has 80,000 pieces of this. A miniscule investor, therefore, who, according to Kuipers, nevertheless applies 'the scorched earth tactic'. With the adage: if we get nothing, nobody gets anything.
Sell assets
At the end of 2017, Steinhoff almost capsized after a huge accounting scandal. Now the conglomerate still sighs under a debt of € 10.3 billion. Steinhoff had a valuation made of the assets, which must be sold step by step. The value of this is estimated at just under €8 billion.
The conglomerate has agreed a debt restructuring with its creditors. Part of this agreement is that the shareholders will be expropriated. But, said Steinhoff's lawyer, the shareholders are already 'out of the money'. After all, debts are higher than assets, and shareholders are at the back of the queue.
SDK thought otherwise. From a valuation that the German investor club made of all assets, an amount approached € 12 billion. Ergo: there is definitely value for the shareholders.
'The core is that the shareholders are sidelined,' said Sander Schouten of AMS Advocaten, who assists SDK. 'All stakeholders have agreed to the restructuring. But who are they? Those are professional hedge funds. They bought the debt at a large discount. They have a loan-to-own strategy.'
Continue financing
The case was discussed in the multiple chamber. The judge spoke of a 'complicated proposal', because the company will be transferred to five foundations. These are in turn controlled by trust companies. Why this Christmas tree? Why don't the creditors say: we will continue to finance for a while?', asks the judge.
Because the creditors do not want the existing capital structure to be maintained, said lawyer Kuipers. "The shareholders must be expropriated." The division into five foundations has to do with future acquisitions. But Kuipers also acknowledged: 'This is a complex offer.'
At the very end of the five-hour session, Marc Liebscher was given the floor. The board member of SDK had come over from Berlin. 'The agreement that has now been reached is not transparent and does not comply with governance.' Bankruptcy would be an empty threat, creditors can simply extend the payment term. His message to the judge: "Don't fall for it."
The last word was for Louis Du Preez, the South African CEO of the beleaguered billion-dollar company. “It is possible that creditors will also claim their debt on June 30. Unless the debt agreement is approved. It is my strong belief that this agreement is the best, so I ask the court to approve it.'
The court's ruling will take place on June 22."
Lees het volledige artikel: fd.nl/bedrijfsleven/1479195/...crediteuren-over-schuldakkoord
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