Steinhoff calls for €200m to stay afloat

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Steinhoff

Steinhoff has begun talks with lenders seeking to acquire €200 million (£176 million) in “interim liquidity support” in an attempt to keep itself from collapsing entirely.

The South African retail giant, which has been the centre of an accounting scandal in recent weeks, is reportedly in talks with banks to secure funds to support its European operations alongside a temporary waver of its debt agreements.

Despite South African banks already pledging €60 million (£52 million) to be paid out by the end of the week, Steinhoff cautioned investors that “there can be no assurance that the company will be able to reach agreement with its finance providers on acceptable terms or at all”.

However, the company – which owns Poundland, Harveys and Bensons for Beds in the UK – added that it would likely require further external liquidity in the future, stating so far it had not been able to secure the funds.

It has also requested a temporary waiver on credit agreements, though it did not reveal a time frame of size of the loans in question.

Steinhoff told creditors that it expected to be able to meet interest payments on its €10.7 billion (£9.4 billion) in debt pile, though not at penalty rates.

In December Steinhoff revealed that it would have to reissue its financial results as far back as 2015, in signs that the “accounting irregularities” ran deeper than first thought.

Shares subsequently plummeted over 80 per cent, wiping around £9 billion off its value.

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