Steinhoff International Holdings N.V.
(Incorporated in the Netherlands)
(Registration number: 63570173)
Share Code: SNH
Steinhoff Investment Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1954/001893/06)
JSE Code: SHFF
(“Steinhoff Investments” or the “Issuer”)
Steinhoff International Holdings N.V. (the “Company” and with its subsidiaries, the “Group”)
Further to the Company’s announcement on 29 June 2018 confirming the amendment and
extension of the formal letters of support entered into by the Company, Steinhoff Europe AG
(“SEAG”) and Steinhoff Finance Holding GmbH (“Finance Holding”) and certain of their
creditors (the “Amended Support Letters”), the Company is pleased to announce that it has
today launched a consent process for a lock-up agreement (the “LUA”) in connection with
the restructuring of the financial indebtedness of the Company, SEAG, Finance Holding and
Stripes US Holding Incorporated (“SUSHI”) (the “Restructuring”). The LUA includes both the term
sheet for the Restructuring (the “Term Sheet”) and the steps plan for its implementation (the
The launch of the LUA marks the culmination of several weeks of discussions with the ad hoc
committees of third party creditors of SEAG, SUSHI and Finance Holding and the coordinating
committee in respect of the Group’s European creditors and represents an important step in
the Restructuring process. Once the LUA becomes effective in accordance with its terms, the
creditors and the Company will seek to implement the Restructuring within three months
(subject to any agreed extension). Once the Restructuring has been implemented, the terms
of the Restructuring (as set out in the Term Sheet) will remain in place for three years (subject
to a maturity long stop date of 31 December 2021).
If sufficient creditor support for the LUA is not obtained and the LUA does not become effective
in accordance with its terms by 20 July 2018 (being the date on which the support period under
the Amended Support Letters will terminate, absent any extension or other form of creditor
support), the Boards of SEAG and Finance Holding will need to assess their options (including
local reorganisation procedures) and obligations under the applicable Austrian law. Creditors
are therefore encouraged to accede and become party to the LUA as soon as possible and,
in any event, by 8.00pm London time on 16 July 2018 to ensure that the LUA becomes effective
in good time and to qualify for the Lock-Up Early Bird Fee (as defined below). Further detail on
the conditions precedent to the LUA and the Lock-Up Early Bird Fee are set out below.
THE SUMMARY BELOW SETS OUT A HIGH-LEVEL OVERVIEW OF THE LUA, TERM SHEET AND STEPS
PLAN. STAKEHOLDERS ARE ENCOURAGED TO REVIEW THE DOCUMENTS IN DETAIL THEMSELVES
(COPIES OF WHICH ARE AVAILABLE AT WWW.LUCID-IS.COM/STEINHOFF AND ON A&O
COLLABORATE FOR PRIVATE SIDE CREDITORS WHO HAVE ACCEDED TO THE FTI COMMON
PLATFORM) AND SEEK THEIR OWN LEGAL AND FINANCIAL ADVICE SHOULD THEY HAVE ANY
QUERIES IN RELATION TO THEIR CONTENTS.
Overview of the LUA
The LUA has been signed by, among others, the Company, Finance Holding, SEAG, SUSHI and
Steinhoff International Holdings Proprietary Limited (“SIHPL”) (together, the “Obligors” and
being the principal borrowers, issuers and guarantors of the external debt of SEAG, SUSHI and
Finance Holding) and certain other Group companies as intra-Group lenders to Finance
Holding, SEAG and/or SUSHI (together the “Intercompany Participants” and, with the Obligors,
the “Group Parties”). The LUA, among other matters, imposes agreed limited recourse and
standstill obligations on relevant internal and external creditors to facilitate the implementation
of the Restructuring by providing the Group and its stakeholders with a period of stability whilst
the relevant documents are negotiated, and arrangements put in place to effect the
Effectiveness of the LUA
The LUA is conditional and will only become effective when, among other things:
• the Group Parties have signed the LUA;
• more than 85% of the aggregate outstanding SEAG external financial indebtedness (or
such lower percentage as more than 50% of the SEAG external creditors who have
signed the LUA at that time may determine, provided such percentage is no lower than
75%) becomes subject to the LUA;
• more than 75% of the SUSHI external financial indebtedness (or such lower percentage
as SUSHI, SEAG, Finance Holding and the Company may determine) becomes subject
to the LUA;
• more than 75% of the nominal amount of each of the series of convertible bonds due
2021, 2022 and 2023 issued by Finance Holding (respectively the “2021, 2022 and 2023
Series”) becomes subject to the LUA; and
• the directors of Finance Holding and SEAG have each established a “positive going
concern prognosis” as a matter of Austrian law, subject to the LUA becoming effective
in accordance with its terms.
Creditors who sign up to the LUA (“Participants”) will, subject to certain terms and conditions
under the LUA, be:
• eligible for an early bird fee (the “Lock-Up Early Bird Fee”) equal to their pro-rata share
o for creditors of SEAG and SUSHI, 0.5% of all locked-up SEAG and SUSHI debt less
the fees payable in connection with the SEAG Amended Support Letter; and
o for creditors of Finance Holding, 0.85% of all locked-up Finance Holding debt
less the fees payable in connection with the Finance Holding Amended
in the event that they accede to the LUA by 8.00pm London time on 16 July 2018 (or
such later date determined by the Company) (the “Lock-Up Early Bird Fee Deadline”).
The Lock-Up Early Bird Fee is subject to certain terms and conditions, including a
requirement for requisite majorities of Participants to have become party to the LUA by
the Lock-Up Early Bird Fee Deadline; and
• entitled to a lock-up fee (the “Lock-Up Fee”) equal to:
o for creditors of SEAG and SUSHI, 0.5% of their locked-up SEAG and SUSHI debt;
o for creditors of Finance Holding, 0.15% of their locked-up Finance Holding debt.
The Lock-Up Fee is payable to each creditor who becomes a Participant by 5.00pm
London time on the earlier of: (i) 2 Business Days (as defined in the LUA) prior to the
date of the implementation and completion of the Restructuring; and (ii) the voting
record date in relation to any scheme meeting or creditors’ meeting relating to the
debt held by any such Participant.
The Lock-Up Early Bird Fee and the Lock-Up Fee shall be capitalised and added to the principal
amount of the reinstated debt in accordance with the Term Sheet upon the implementation
and completion of the Restructuring.
SEAG and SUSHI Roll-over and Maturity Fees
Each Participant that remains a Participant on the date of the implementation and
completion of the Restructuring (the “Restructuring Effective Date”) who:
• holds SEAG/SUSHI debt that has been rolled-over until the Restructuring Effective Date
solely during the period commencing on 1 January 2018 and ending on the
Restructuring Effective Date will be entitled to receive a fee equal to 1% of such
SEAG/SUSHI debt; and/or
• holds SEAG/SUSHI debt with a contractual maturity date during the period
commencing on 1 January 2018 and ending on the Restructuring Effective Date and
who has agreed to extend the contractual maturity date of such debt until the
Restructuring Effective Date, will be entitled to receive a fee equal to 1% of such
The rollover and maturity fees identified above will be capitalised and added to the principal
amount of the reinstated debt in accordance with the Term Sheet upon the implementation
and completion of the Restructuring.
Accession to the LUA
Creditors of Finance Holding, SEAG and/or SUSHI may accede and become a party to the
LUA in respect of all (but not less than all) financial indebtedness of Finance Holding, SEAG
and/or SUSHI of which they are a beneficial owner by executing an accession letter to LUA.
Lucid Issuer Services Limited has been appointed as the calculation agent (the “Calculation
Agent”) for the purposes of the LUA. A copy of the LUA is available on the Calculation Agent’s
website at www.lucid-is.com/steinhoff and on A&O Collaborate for private side creditors who
have acceded to the FTI common platform, together with instructions on how to execute an
accession letter to accede to the LUA.
Any queries regarding the accession process in relation to the LUA should be directed to the
Calculation Agent at: Lucid Issuer Services Limited, Tankerton Works, 12 Argyle Walk, London,
WC1H 8HA, T: + 44 20 7704 0880, E: firstname.lastname@example.org.
Overview of the terms of the LUA
The LUA imposes agreed limited recourse and standstill obligations on Participants and
Intercompany Participants and secures their support for the Restructuring for the period ending
on the earlier of: (i) the Restructuring Effective Date; (ii) the date falling three months from the
date on which the LUA comes into effect (which may be extended in certain circumstances);
and (iii) the date on which the LUA is terminated in accordance with its terms (the earliest of
(i) to (iii) being the “End Date”).
Under the terms of the LUA:
• each Participant and Intercompany Participant agrees that indebtedness owed to
them by SEAG and/or Finance Holding shall be subject to limited recourse terms for
the period commencing on the date on which the LUA becomes effective in
accordance with its terms and ending once certain events have occurred;
• each Participant and Group Party undertakes to support, facilitate and implement the
Restructuring in accordance with the Term Sheet and Steps Plan, including entering
good faith negotiations to agree the definitive transaction documents, until the End
• the Obligors give undertakings to the Participants in respect of various matters
including the incurrence of further indebtedness, the granting of security and making
material disposals, as well as agreeing to treat the Group’s creditors on a fair and
consistent basis having regard to such creditors’ contractual rights;
• no Participant or Group Party will take any enforcement action in respect of the
financial indebtedness of Finance Holding, SEAG or SUSHI prior to the End Date;
• Participants may not assign any voting rights or interest in any such financial
indebtedness unless the transferee accedes to the terms of the LUA;
• each Participant consents to the roll-over or the extension of the maturity date in
respect of any financial indebtedness of Finance Holding, SEAG or SUSHI falling due
prior to the End Date;
• the Company agrees to consult with the governance working group in order to agree
on certain governance changes within the Group (see overview of Term Sheet -
Review of and changes to the governance of the Company below); and
• the Company agrees, as part of the terms of any restructuring agreed with creditors
of Hemisphere International Properties B.V. (“Hemisphere”) regarding a restructuring
of Hemisphere’s debts, that in relation to the rights and recourse of those lenders or
Hemisphere against the Company, such terms shall not be more favourable in any
material respect to the lenders to Hemisphere than those produced by the
Restructuring, without the requisite consents of the SEAG, SUSHI and Finance Holding
locked-up external creditors.
Overview of Term Sheet
The Term Sheet sets out: (i) certain proposed changes to the governance of the Group; (ii) the
proposed revised terms of the various debt instruments of each of the SEAG, SUSHI and Finance
Holding debt clusters; and (iii) certain related amendments in relation to the guarantees of
such debt instruments provided by the Company.
Review of and changes to the governance of the Company
A governance working group has been established from certain creditor representatives to
work alongside the Company’s Nominations Committee to consult on matters including
changes which could be introduced to the composition of the Supervisory Board and the
Management Board of the Company (the latter to comprise no more than five individuals).
The search for new candidates for the Company’s boards shall be led by the Nominations
Committee in consultation with the governance working group and a shareholders’ meeting
will be convened in due course to seek approval from shareholders for the appointment of
any suitable candidates identified through the search process (the “Governance Shareholder
In addition, a litigation committee will be established by each of the Company’s boards to
oversee material litigation claims in respect of the Group.
Review of and changes to governance of the SEAG cluster
As part of the revised terms of the SEAG debt, the Group has agreed to make certain changes
to the governance of the entities within the SEAG cluster:
- a new holding company (“New Holdco”) is to be inserted into the Group structure
above SEAG’s immediate parent company, Steinhoff Mobel Holdings Alpha GmbH
- SEAG creditors will have the right, in consultation with the Company, to nominate up
to 4 appropriately qualified individuals to be appointed to the board of New Holdco
which will have a board comprising 6 directors in total (2 directors will be nominated
by the Company). The boards of SEAG and Mobel will be similarly constituted; and
- the board of New Holdco will have the ability to determine the composition of the
boards of the operating companies in the SEAG cluster.
Changes to governance of Finance Holding and SIHPL
As part of the revised terms of the Finance Holding and SIHPL debt, the Group has agreed to
make certain changes to the governance of the following entities:
- two members of the Management Board of Finance Holding will be appointed by the
Company’s Management Board following any changes made pursuant to the
governance review process referred to above; and
- changes will also be made to the composition of the board of SIHPL, a guarantor of
the 2021 and 2022 Series, to include a representative nominated by the holders of the
2021 and 2022 Series.
Revised debt terms
The following terms are intended to apply across all of the SEAG, SUSHI and Finance Holding
private debt with effect from the Restructuring Effective Date:
- Amount of restated debt
o External debt to be restated at par plus accrued interest and agreed fees.
o SEAG and SUSHI external debt split between SEAG 1st and 2nd tranches (with
each tranche split into 1st and 2nd lien). SEAG intercompany debt owing to
Steinhoff Africa Holdings Pty Ltd (“SAHPL”) and the net intercompany debt
owing from SEAG to Finance Holding shall be restated as 2nd lien debt and
recorded at par plus accrued interest as at 31 March 2018. Intercompany debt
owing to AIH Investment Holding AG (“AIH”) may (subject to an alternative
structuring solution in relation to that debt being agreed) be restated as priority
2nd lien debt. Other intercompany debt to entities within the SEAG group to
remain unsecured but the entities will receive the benefit of support
arrangements from SEAG.
o Finance Holding external debt and debt owing from Finance Holding to SIHPL
to be 1st ranking. Intercompany debt owing from Finance Holding to Steinhoff
Investment Holdings Ltd to be 2nd ranking debt.
o Creditor recoveries for SEAG (including SUSHI) and Finance Holding are capped
at par plus accrued interest (including PIK interest – see below) and fees.
o 10% PIK per annum (capitalising semi-annually).
o The PIK interest rate increases to 15% if the Governance Shareholder Resolution
is not passed.
o Maturity is 3 years from the Restructuring Effective Date both for external and
intercompany debt, subject to a maturity long-stop of 31 December 2021.
For SEAG (in respect of external debt and intercompany debt to SAHPL, AIH (if
applicable) and Finance Holding) this is expected to include:
o 1st ranking security over shares, receivables and bank accounts of SEAG, shares
held by SEAG in subsidiaries and other assets of SEAG;
o 1st ranking security over shares in, as well as guarantees and asset security from,
New Holdco, Mobel and SUSHI;
o 1st ranking security over shares in Steinhoff UK Holdings Ltd and intermediate
holdcos above SEAG operating companies; and
o limited recourse guarantees given by and asset security given by SEAG
operating companies where possible and subject to consents.
For Finance Holding, security over the shares of Finance Holding and Hemisphere as
well as security over other Finance Holding assets, but excluding shares in New Holdco
- Undertakings regarding material asset disposals - SEAG
o Asset disposals by SEAG or its subsidiaries or SUSHI will be initiated at the
discretion of the board of New Holdco and will require majority approval from
2nd lien SEAG creditors and the Company’s shareholders if required by Dutch
law or the Company’s constitutional documents.
o Where approval by the Company’s shareholders is required for such asset
disposals, the Company shall seek such approval unless it considers the terms
of the transaction to effect the relevant asset disposal to be clearly
o If shareholder approval is not obtained, a mandatory prepayment event will
occur under the SEAG debt documents (with SEAG required to make payment
within 12 weeks in an amount equal to the estimated net proceeds of the
proposed sale). If the Company raises the funds to enable SEAG to meet the
prepayment, the security over the relevant asset shall be released and the
asset will remain within the Group and be held directly by the Company. If the
prepayment is not made, an event of default will occur under the relevant
SEAG security document with respect to the relevant asset in order to effect a
sale of that asset.
- New money - SEAG
o Any new debt being raised by the Company, SEAG or Finance Holding shall be
offered pro rata to the creditors of SEAG and Finance Holding, provided that if
the Group is offered better terms than those offered by the creditors of SEAG
and Finance Holding, the Group has the ability to accept such terms.
o Incremental new money debt basket to be structured on ‘last in first out’ basis.
- Cash pay-out and prepayment - Finance Holding
o Reasonable endeavours to make a cash paydown by SIHPL as guarantor in the
region of 25% on 2021 and 2022 Series by 31 March 2019.
o Undertaking to consider on an ongoing basis, and at least quarterly,
opportunities to make further cash pay outs from SIHPL, based on a quasi-
liquidation distribution methodology.
Guarantees for the restated SEAG and Finance Holding debt
The following terms have been agreed with regard to amending the guarantees provided by
the Company that currently support certain of the external debt of SEAG and Finance Holding
and the guarantee provided by SIHPL and will apply with effect from the Restructuring
- Scope of Company guarantees
o Guarantees in respect of guaranteed SEAG, SUSHI and Finance Holding debt
crystallise on the Restructuring Effective Date at restated debt amounts
(excluding the support letter consent fees).
o For SEAG and SUSHI guaranteed creditors, the Company guarantees remain
fully outstanding until the maximum amount payable by the Company under
the guarantees has been paid by it or an amount has been received by the
SEAG guaranteed creditors equal to restated debt plus PIK interest capped at
5% (with an increase to 10% if Governance Shareholder Resolution is not
o For Finance Holding debts, there is no equivalent PIK interest cap, unless the
Governance Shareholder Resolution is not passed (in which event the cap is
o Creditor recoveries under the Company guarantees are capped at the
amount of restated debt obligations plus PIK interest (subject to the PIK interest
caps (where applicable) and agreed fees) provided that the aggregate
amount paid under the Company guarantees shall not exceed the restated
debt amounts plus accrued, deferred, rolled-up and/or subordinated interest
and fees (excluding any support letter consent fees) at the Restructuring
o Company has agreed a negative pledge as well as certain restrictive
undertakings regarding the operations of the Company and certain of the
South African subsidiaries as well as certain covenants regarding debt
incurrence and future acquisitions.
- SIHPL Guarantee
o 2021 and 2022 Series also benefit from crystallised guarantee claim against
Overview of the Steps Plan
The Steps Plan sets out the steps that will be required to implement the Restructuring, as
envisaged by the Term Sheet, on a contractual basis with the various creditors groups.
However, given the complexity of the Group’s debt instruments and number of creditors
involved, it may not be possible for the Group to achieve the relevant approval thresholds for
a contractual implementation. Therefore, the Steps Plan sets out the steps required for the
Group to make use of certain restructuring procedures under applicable law that may
facilitate the implementation of the Restructuring with lower approval thresholds required to
bind dissenting or non-consenting creditors (assuming the statutory approval thresholds and
other requirements are met).
Shareholders and other investors in the Company are advised to exercise caution when
dealing in the securities of the Group.
JSE Sponsor: PSG Capital
Stellenbosch, 11 July 2018
Date: 11/07/2018 03:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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