International credit insurers have decided to withdraw insurance coverage for Steinhoff International Holdings NV's loans, Reuters reported June 4, citing a statement from the embattled retailer's Austrian subsidiary Kika/Leiner.
The report comes as Steinhoff faces additional impairments as a result of the fallout from accounting irregularities discovered in December 2017.
"The loss of the credit insurance is a result of the Steinhoff crisis," Kika/Leiner reportedly said in a statement.
In an interview with radio station ORF, Kika/Leiner CEO Gunnar George reportedly said the credit insurers' decision caught him by surprise, adding that some of their major suppliers have given him until the end of the week to resolve the issue.
George said a large amount of Steinhoff's debt still has to be rescheduled and that he has initiated talks to find new credit insurers. About 90% of Kika/Leiner's loans are covered by a single insurer, the report said.
"There is a future for Kika/Leiner in Austria, whether with Steinhoff or without," George reportedly told the radio station, although he dismissed speculations about a potential sale of Kika/Leiner, saying he did not have a mandate from Steinhoff's senior management to do this.
The report comes less than two weeks after Steinhoff said it had no African debt after repaying about €2 billion since January 2018. When it reported financial results on May 18, Steinhoff provided creditors with a restructuring plan and sought a three-year extension on its outstanding debt, which stands at €9.6 billion.
