Ann Crotty Writer-at-large
Steinhoff offices. Picture: BLOOMBERG/DWAYNE SENIOR
Steinhoff offices. Picture: BLOOMBERG/DWAYNE SENIOR

The effective date for implementation of the new €750m loan facility provided for Hemisphere International Property, which holds Steinhoff’s controversial international property portfolio, has been pushed out to August 18 from August 3.

Steinhoff gave no explanation for the two-week delay but in a SENS announcement released on Monday morning told shareholders that the company and its lenders were continuing discussions on the restructuring of Hemisphere’s debt and were now planning to implement the agreement by August 18.

In early April Steinhoff shocked the investment community when it announced that Hemisphere’s property portfolio might be worth only half of the €2.2bn at which it had been valued as recently as February 2018.

Concerns about the reported values were raised during the investigation into "accounting irregularities" when it emerged that the property valuations may have been artificially inflated as a result of related party rental agreements.

In the April SENS statement Steinhoff said global real estate services’ company CBRE had been engaged to help determine the validity and recoverability of certain non-South African assets.

Hemisphere’s portfolio comprises 140 properties including stores, warehouses, offices, production sites and vacant land. They are situated across Austria, Germany, the Netherlands, Switzerland, the UK and Eastern Europe. The majority of the stores in Austria and Eastern Europe are stores leased to retail chain Kika-Leiner.

In the interim report released in July Steinhoff said the CBRE report uncovered various non-arm’s length transactions where properties were sold and later repurchased at inflated values.

"A decision was taken by management to revert back to the initial property cost for the group as, in substance, control of the properties has never been transferred," said Steinhoff.

The group is currently in the process of finalising the sale of Kika-Leiner.

The Hemisphere portfolio does not include retail stores relating to Harveys, Bensons-for-Beds, Conforama, Dealz, Pepkor Europe, Poco and Poundland.

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