Whoa — Steinhoff launches Dutch restructuring plan that leaves shareholders high and dry
Days after a German shareholder group blocked retail holding company Steinhoff International Holdings’ debt relief plan, the fraud-hit group has launched a Dutch Whoa restructuring plan that could see debt repayment dates extended for three years, leaving shareholders with nothing.
Steinhoff is in effect bankrupt, with the clock ticking on a €10.2-billion (R200-billion) debt due on 30 June that it cannot honour.
Last week, on 23 March, it failed to pass a plan to give creditors 80% of its equity, described as intended to facilitate its orderly unwinding to avoid bankruptcy, and “create a stable platform to potentially realise higher proceeds from the controlled sale of the assets”, Bloomberg quoted its CEO, Louis du Preez, as saying.
The holding company announced on Wednesday that it had resolved to initiate a private Dutch restructuring plan known as “Whoa” (Wet Homologatie Onderhands Akkoord) after its proposal to approve equity reorganisation by shareholders at the group’s annual general meeting on 22 March.
The Whoa plan, submitted to the Dutch Parliament in 2019, introduces a framework under which tailor-made restructuring plans can be implemented outside formal insolvency proceedings. They allow for a fast and efficient restructuring procedure outside of formal insolvency which, in principle, can be completed within months.
Whoa helps important stakeholders to avoid an uncontrolled insolvency and preserve the debtor’s value at an early stage of the process.
The restructuring plan will affect Steinhoff’s creditors and shareholders but does not affect its obligations in terms of the global settlement that was reached on 15 February 2022.
In January last year, the Western Cape Division of the High Court approved Steinhoff’s financial settlement with claimants, who — in exchange for dropping all legal challenges against the group — would take a share of a pot of €1.43-billion.
The launch of the Whoa plan will initiate a period of consultation on the terms of the proposed plan between Steinhoff and its shareholders, which could take about two weeks. Affected stakeholders are encouraged to submit their views on the draft Whoa during this period to [email protected].
Read more in Daily Maverick: The Finance Ghost — Why is Steinhoff still trading at all?
If the restructuring plan fails or is not confirmed by the Dutch court by 30 June 2023, Steinhoff may be in default and stakeholders would retain zero economic interest in the restructured group. DM/BM