JOHANNESBURG – The South African owner of Mattress Firm Steinhoff International Holdings has come to an agreement with some of its largest creditors to restructure its 10-billion-euro debt and extend the maturity by three years into 2026.
The company’s announcement this morning sent its stock tumbling as much as 55% on the Johannesburg Stock Exchange. A 2017 accounting scandal has resulted in 90 legal claims against the company. Since then, Steinhoff has been making moves to reduce its debt.
In a statement, the company said the agreement with its largest financial creditors that represent 64% of the company’s total debt “provides a stable platform for Steinhoff to achieve the consents necessary” to extend the debt maturity from June 30, 2023, to at least June 30, 2026. The company said its assets continue to be less than its liabilities and will remain so on June 30, 2023.
Steinhoff acquired Mattress Firm in 2016 in a cash and stock deal valued at nearly $4 billion. Last year, the international holding company had been considering an IPO for Mattress Firm, but market conditions, it said, were not favorable.
The Steinhoff board said if shareholders agree to the transaction, they will retain 20% interest in the post-closing equity of the company while the financial creditors will be entitled to the balance. If shareholders do not agree, they will have no interest in the company.
In asking for shareholder and creditor support, the company said the transaction “will maintain the stable platform for continued value creation and monetization Steinhoff’s portfolio of assets.”
Under the proposed agreement, the company may request two 12-month extensions beyond the June 2026 date. In its filing, Steinhoff said its current debt facilities are held by a number of different financial creditors in complicated relationships.
“Taking into account the economic and other challenges currently facing the group this is ultimately a very good deal for the group,” said Louis du Preez, CEO and management board member of Steinhoff International. “The extension allows time for the group to realize the inherent value of its investments in a controlled manner. As such we are greatly encouraged by the progress made so far, and we urge all stakeholders to support the finalization and implementation of these proposals.”
