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STEINHOFF INTERNATIONAL HOLDINGS N.V. - Steinhoff Issue Of Proposals In Connection With Company Voluntary Arrangements For SEAG And SFHG

Release Date: 30/11/2018 17:25
Code(s): SNH SHFF     PDF:  
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Steinhoff – Issue Of Proposals In Connection With Company Voluntary Arrangements For SEAG And SFHG

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 – Issue of proposals in connection with company voluntary arrangements for SEAG
and SFHG prior to creditors’ meetings scheduled for 14 December 2018
Steinhoff International Holdings N.V. (the “Company” and with its subsidiaries, the “Group”).

The Company refers to its announcements of 19 November 2018 (the “19 November
Announcements”) in respect of the issue of a company voluntary arrangement in relation
to Steinhoff Europe AG (“SEAG”) (the “SEAG CVA Proposal”) and a consent solicitation
process by the Company in respect of convertible bonds issued by Steinhoff Finance
Holding GmbH (“SFHG”), (the “Consent Solicitations”).

Further to the 19 November Announcements, the Company is pleased to provide an
update on the restructuring of the Group’s financial indebtedness and, in particular, to
provide an update on the issue of the SEAG CVA Proposal and announce the issue of the
SFHG CVA Proposal (following the withdrawal of the Consent Solicitations as detailed
below).

These 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.

Withdrawal of Consent Solicitations in favour of a company voluntary arrangement of SFHG

The Company has terminated the Consent Solicitations and withdrawn the extraordinary
resolutions in respect of the three series of outstanding SFHG issued convertible bonds due
2021, 2022 and 2023 (the “Convertible Bonds”), as it has determined that the restructuring
of the Convertible Bonds will be more effectively achieved by way of a company voluntary
arrangement of SFHG under Part 1 of the Insolvency Act 1986 (the “SFHG CVA Proposal”).

The SFHG CVA Proposal has been made to Alan Bloom, Alan Hudson and Simon Edel of
Ernst & Young, who have consented to act as nominees for both the SFHG CVA Proposal
and the SEAG CVA Proposal (the “Nominees”).

Issue of the SEAG CVA Proposal and the SFHG CVA Proposal
The Company understands that the Nominees have reviewed and considered the SEAG
CVA Proposal and SFHG CVA Proposal (together the “Proposals”) and today issued a report
to the High Court of England and Wales in respect of each of the Proposals.

The Nominees’ reports having been filed at the High Court, today the SEAG CVA Proposal
is being published to all creditors of SEAG and the SFHG CVA Proposal is being published to
all creditors of SFHG. Creditors of SEAG and SFHG will now have a period of time to review
and consider the SEAG CVA Proposal and the SFHG CVA Proposal respectively, before
voting at the creditors’ meetings to be held on 14 December 2018.

A requirement in respect of each of the SEAG CVA Proposal and SFHG CVA Proposal is that
completion of both company voluntary arrangements will be inter-conditional with each
other.

Key aspects of the SEAG CVA Proposal:

The SEAG 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 restructured by way of a new term loan
    facility to be issued by a newly incorporated Luxembourg company which shall sit as
    an indirect subsidiary of SEAG (the “New SEAG Luxco Debt”). The New SEAG Luxco Debt
    shall accrue PIK interest which shall capitalize on a semi-annual basis and the facility
    shall mature on 31 December 2021;
•   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 SEAG 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 is contained in the SEAG CVA Proposal which includes an anticipated
timetable and instructions for SEAG creditors on the actions which they will need to take.
The SEAG CVA proposal, together with certain supporting documentation, can be
downloaded free of charge at www.lucid-is.com/steinhoff.

Key aspects of the SFHG CVA Proposal

The SFHG CVA Proposal includes the following key aspects:
•   the restructuring of the Convertible Bonds as indebtedness in the form of guaranteed
    secured loans to mature on 31 December 2021 and which shall accrue PIK interest
    which shall capitalize on a semi-annual basis. 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 either a guarantee or 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 SFHG CVA Proposal, 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 SFHG
    CVA Proposal.

Further information is contained in the SFHG CVA Proposal which includes an anticipated
timetable and instructions for SFHG creditors on the actions which they will need to take.
The SFHG CVA proposal, together with certain supporting documentation, can be
downloaded free of charge at www.lucid-is.com/steinhoff.

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, 30 November 2018

Date: 30/11/2018 05:25:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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