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Steinhoff says it will seek waiver from creditors 'shortly'

Steinhoff International Holdings NV, the South African retailer embroiled in an accounting scandal, on Feb. 2 said it would "shortly" seek waivers from its creditors so that it has breathing space to develop strategic options and management can focus on trading performance.

The company, which operates Sleepy's in the U.S., Poundland in the U.K., and Conforama in continental Europe, in a statement said it would propose a waiver covering the period through June 30. If approved, the waiver would allow Steinhoff to avoid defaults arising from its disclosure in December 2017 of accounting irregularities and, in particular, its failure to report consolidated financial accounts for its fiscal year ended Sept. 30, 2017, and the need for it to restate accounts for prior years.

It reiterated that the waiver proposal would not include the financings of Mattress Firm, owner of the Sleepy's brand, Conforama, or subgroups in the U.K., South Africa and Australia.

"The group continues to expect to be in a position to pay cash interest on all its existing financial indebtedness at the ordinary contractual rate over the near-term forecasted period, noting that this remains under constant review," the Stellenbosch-based company said.

Under the terms of its waiver proposal, Steinhoff said it would not declare, make or pay any dividend, or allow any of its companies to undertake mergers or acquisitions (subject to certain exceptions).

It added that the proposal did not seek a waiver of any payment default or any potential future defaults if caused by new events or circumstances.

Steinhoff said it was confident that it would receive sufficient support for the waiver from its finance providers, reiterating comments it made Jan. 18.

Steinhoff, incorporated in the Netherlands, previously disclosed that it has €10.70 billion in outstanding debt.