Steinhoff said it would defend itself against a R59bn claim by former chair Dr Christo Wiese’s entity Titan Group.
According to a notice issued to shareholders on Thursday afternoon, in which Steinhoff gave an update on processes since its annual general meeting (AGM) in April, the group shared its intentions to protect itself and its shareholders.
Fin24 previously reported that Wiese intends to recover R59bn from Steinhoff for the retail group’s acquisition of Pepkor Limited. At the time Steinhoff said it was studying the action before taking a decision.
The group confirmed it had received the claim from Titan. “The position in respect of Dr Wiese and the entities associated with him is different to that of other vendor and shareholder claims, due to the intimate involvement of Dr Wiese in and with the group over many years.
“The company shall, in order to protect the group and its stakeholders, use all means and resources available to it to vigorously defend the Wiese entities’ action,” the update read.
Wiese did not join the class action against Steinhoff. The VEB class action is scheduled to be heard in Amsterdam before the end of September 2018, the group said.
Since the AGM, Steinhoff said it received a request for authorisation of the German class action suit. Steinhoff is in the process of considering the claim and “obtaining appropriate legal advice”.
The group has also received demands from businessman and banker GT Ferreira for €100m (R1.47bn) and Tekkie Town vendors for €120m (R1.76bn).
“If and when initiated, these claims will be considered in the context of the group’s anticipated restructuring,” Steinhoff said of the claims.
Race to restructure
The group also gave an update on its debt position.
As at March 31 2018, Steinhoff’s outstanding debt was at €10.4bn (R153bn). Of this €8.7bn (R128.5bn) is attributable to operations in Europe, €1.4bn (R20.61bn) to operations in South Africa and €0.25bn (R3.68bn) to US operations.
In South Africa, €200m (R2.94bn) has been repaid since March 31 2018. “The group anticipates that repayment of the African Group Debt will be completed shortly.
“Upon completion of the African debt repayment programme, the group will have successfully repaid approximately €2bn (R29.44bn) since January 2018,” the company said.
Apart for its automotive business and its Africn properties division, the group will have no remaining debt on the continent.
As for Europe and US, Steinhoff intends to present its restructuring plan to lenders in London on May 18.
“The plan is to present the group’s updated restructuring proposal to the lenders. This updated restructuring plan will cater separately for the requirements of the various groups of lenders.”
The group has relied on asset realisations to fund working capital, interest and professional advisers’ fees. However, this is not sustainable. The restructuring plan will include proposals for the management of cash flows and ongoing working capital requirements.
“It is imperative that a restructuring plan is agreed with stakeholders as soon as possible in order to provide a more stable trading environment for the group’s operations, its people, suppliers and service providers, and to allow management more time to focus on and assist the underlying business,” the statement read.
The group also provided an update on the PwC investigation, indicating it received feedback for the outcomes of the first four months of the investigation which revealed further material impairments of €6bn (R88.32bn), Bloomberg reported.
“As part of the PwC process, the roles and responsibilities of those previously at the helm of the group are being investigated and appropriate action shall be taken by the group as soon as practically possible,” Steinhoff said.
The company is also considering reclaiming bonuses paid in the past to certain senior executives under the relevant Dutch code, the group said.
Further details of the investigation will be revealed in the June 2018 presentation of the group’s interim results.
“The group is making every effort to ensure that its unaudited interim results for the six-month period ending 31 March 2018 are published before the end of June 2018, including an unaudited balance sheet for 30 September 2017,” said Steinhoff.