South African retailer Steinhoff International Holdings NV said June 7 that it received creditor support for a restructuring plan that involves two subsidiaries the embattled company uses to finance operations in Europe and the U.S.
According to the support letters sent to Steinhoff, the creditors have agreed to provide interim measures to assist in stabilizing the financial position of Steinhoff Europe AG, or SEAG, and Steinhoff Finance Holding GmbH until June 30.
The creditors also committed to subordinate a total of approximately €154 million of their contractual rights, apart from interest payments accruing to them in June, against the two Steinhoff units.
The standstill commitment includes creditors that hold a majority of convertible bonds issued by the Austria-based holding company, as well as holders of about 61% of SEAG's debt.
As part of the agreement, the relevant creditors will be entitled to a consent fee calculated based on 50% of a subordinated claim at a particular date after Steinhoff implements and completes its restructuring activities.
The announcement comes after Steinhoff's international credit insurers were reported to have withdrawn their insurance coverage for the struggling retailer's loans.
In May, the company that runs Sleepy's brand in the U.S., Poundland in the U.K., and Conforama in continental Europe said it repaid all of its African debt amounting to about €2 billion.
