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Update On Restructuring
Steinhoff International Holdings N.V.
(Incorporated in the Netherlands)
(Registration number: 63570173)
Share Code: SNH
ISIN: NL0011375019
Steinhoff Investment Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1954/001893/06)
JSE Code: SHFF
ISIN: ZAE000068367
Steinhoff – Update on Restructuring
Steinhoff International Holdings N.V. (the “Company” and with its subsidiaries, the “Group”)
The Company refers to its announcement earlier today (the “19 November
Announcement”) in respect of the launch of the CVA and Consent Solicitations (each as
defined in the 19 November Announcement).
Further to the 19 October Announcement the Company is pleased to provide an update
on the following:
• the launch of the CVA in relation to Steinhoff Europe AG (“SEAG”);
• the launch of the Consent Solicitations in respect of Steinhoff Finance Holding GmbH
(“SFHG”) issued convertible bonds;
• the SUSHI Scheme; and
• an extension to the LUA under its terms.
The CVA and Consent Solicitations processes relate to the restructuring of debt at SEAG
and SFHG and are not expected to have any impact on any of the Group’s operating
businesses, their landlords or trade creditors.
Launch of CVA in relation to SEAG
In relation to the lock-up agreement entered into by the Company on 11 July 2018 (the
“LUA”), SEAG has today made a proposal for a CVA under Part 1 of the Insolvency Act 1986
(the “CVA Proposal”) to Alan Bloom, Alan Hudson and Simon Edel of Ernst & Young, acting
as nominees for the CVA Proposal (the “Nominees”). The Nominees will now proceed to
review and consider the CVA Proposal and are expected (if they see fit) to issue a report
to the High Court of England and Wales. Under the relevant UK statutory provisions, the
Nominees have up to 28 days to consider the CVA Proposal. A further announcement will
be made once the Nominees issue their report including an update on the timetable for
the CVA Proposal.
Upon the issuance of the Nominees’ report to the High Court, the CVA Proposal will be
published to all creditors of SEAG, whereupon the creditors will have a period to review the
CVA Proposal before voting on it. The CVA Proposal includes the following key aspects:
• the corporate holding structure of SEAG will be restructured with the incorporation of
new Luxembourg, Jersey and UK incorporated companies as direct and indirect
holding companies and subsidiaries of SEAG;
• at closing there will be a hive-down of almost all of the assets and liabilities from SEAG
to certain of these newly incorporated Jersey and UK companies;
• SEAG’s existing financial indebtedness will be refinanced by way of a new debt
instrument issued by a newly incorporated Luxembourg company which shall sit as an
indirect subsidiary of SEAG (the “New SEAG Luxco Debt”);
• SEAG’s existing financial creditors will be able to participate in the New SEAG Luxco
Debt, such participations to have the benefit of a security package to be granted by
the new SEAG corporate group;
• to the extent that SEAG’s existing financial creditors currently benefit from a guarantee
from the Company in respect of their holding of existing SEAG debt, such financial
creditors will also receive the benefit of a new deferred contingent payment instrument
to be provided by the Company in respect of the New SEAG Luxco Debt; and
• to facilitate completion of the financial restructuring, an interim moratorium will, subject
to approval by SEAG’s creditors of the CVA Proposal, come into force from the date of
such approval and will have the effect that SEAG’s creditors will be prohibited from
taking certain enforcement action against SEAG from such date until the
implementation of the financial restructuring or the termination of the CVA.
Further information will be contained in the CVA Proposal which when published, will
include an anticipated timetable and will also contain instructions for SEAG creditors on the
actions which they will need to take. A further announcement will be provided upon
publication of the CVA Proposal.
Launch of Consent Solicitations in respect of SFHG issued convertible bonds
The Company has today launched Consent Solicitations in respect of the three series of
outstanding SFHG issued convertible bonds due 2021, 2022 and 2023. Bondholder meetings
for each series of bonds will, pursuant to the terms of the Consent Solicitations, be convened
for holders to consider the extraordinary resolutions proposed by the Company. The date
for those meetings has not yet been fixed. Each such extraordinary resolution includes the
following key proposals:
• the restructuring of the convertible bonds as new indebtedness in the form of
guaranteed secured loans with a three-year maturity and PIK interest terms. It is
proposed that the loans so extended by holders of the convertible bonds due 2021 and
2022 would be restructured into a single loan facility and that the loans so extended by
the holders of the convertible bonds due 2023 would be restructured into a separate
loan facility, each with a new Luxembourg incorporated entity as the borrower. The
2021/2022 and the 2023 loan facilities will rank pari passu at borrower level;
• These loan facilities will benefit from deferred contingent payment instruments from in
the case of the 2021/2022 loan facility, the Company and Steinhoff International
Holdings Pty Ltd and in the case of the 2023 loan facility, the Company, reflecting the
guarantor structure in relation to each existing series of convertible bonds;
• the new restructured indebtedness will take the form of private loan facilities and the
convertible feature of the existing convertible bonds will be removed; and
• to facilitate completion of the financial restructuring, an interim moratorium will, subject
to approval of SFHG’s creditors of the Consent Solicitations, come into force from the
date of such approval and will have the effect that SFHG’s creditors will be prohibited
from taking certain enforcement action against SFHG or the Company from such date
until the implementation of the financial restructuring or the termination of the Consent
Solicitations.
It is expected that detailed supporting documents for the Consent Solicitations will be
provided to bondholders in due course to assist bondholders in considering the
extraordinary resolutions. A further announcement will be provided once such long form
documents have been circulated.
A requirement in respect of each of the CVA and Consent Solicitations processes is that
completion of both exercises will be inter-conditional with each other.
Update on SUSHI Scheme
The Company refers to its announcement of 13 November (the “13 November
Announcement”) in respect of the SUSHI Scheme (as defined in the 13 November
Announcement) having been sanctioned by the High Court of Justice in England and
Wales. The Scheme Sanction Order was recognised in proceedings under chapter 15 of
title 11 of the United States Code by the United States Bankruptcy Court for the District of
Delaware on 13 November 2018. The Scheme Sanction Order (as defined in the 13
November Announcement) was lodged with the Registrar of Companies (within the
meaning of the Companies Act 2006, as amended) on 16 November 2018, and the SUSHI
Scheme was implemented in accordance with its terms.
Extension of LUA
The SUSHI Scheme having become effective and the CVA Proposal and Consent
Solicitations processes having been initiated, the LUA is extended to 20 February 2019.
The Group restructuring otherwise continues in accordance with the terms of the LUA and
the Company will continue to provide updates as appropriate.
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, 19 November 2018
Date: 19/11/2018 05:40:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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