Steinhoff secures fresh round of funds to stay afloat

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markus Jooste

Steinhoff has given its creditors some hope after securing enough money to keep the businesses running in the immediate term.

The latest development in the accounting scandal means Steinhoff can now start talks with a broader group of creditors.

In a meeting with its lenders on Friday in London, the South African retail company committed to posting a quarterly trading update at the end of February.

The troubled company has arranged new credit lines for its operations in the US and France as well as agreeing a restructuring of its Austrian division, it said in a presentation published on its website.

In the UK, Steinhoff has managed to raise £260 million, an increase from the £180 million of new funding announced on January 3 to keep its local retail fascias Poundland, Harveys and Bensons for Bed afloat.

However, its business in Asia-Pacific is continuing with discussions with their banks to secure additional funding by mid-February.

Steinhoff also agreed with its South African lenders to repay €200 million (£175.6 million) owed to entities outside the country.

That repayment is set to be refunded with proceeds from the sale of shares in financial services firm PSG Group, Steinhoff said.

It also confirmed it was looking to redeem all of the debt of its South African holding companies, and 8 billion rand (£474 million) of bonds.

Meanwhile, an investigation by PricewaterhouseCoopers into Steinhoff’s accounting irregularities – which was revealed in early December and triggered an 85 per cent share slide – is ongoing.

Steinhoff plans to restate its financial results going back as far as 2015, and will provide a trading update on the last three months of 2017 in the last week of February.

Steinhoff’s shares rallied by around 8.5 per cent on the Frankfurt Stock Exchange on Friday after the latest news emerged.

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