Steinhoff’s US business secures $225m loan despite parent’s woes
Steinhoff International’s US subsidiary, Mattress Firm, managed to secure up to $225m in credit despite the woes of its parent.
Mattress Firm issued a statement at about 11.20pm on Friday night saying it had secured an initial $75m "senior secured asset-based revolving credit facility" which could be extended up to $225m.
Barclays acted as administrative agent, sole book runner and sole lead arranger of the facility, Mattress Firm said.
Steinhoff bought Mattress Firm for $2.4bn in 2016, less than a year after Mattress Firm itself bought the owner of Sleepy’s retail stores for $780m, the Wall Street Journal reported.
"This new credit facility provides independent liquidity and capital to support our strategy, and demonstrates the strength of our business, the value of our assets and the quality of our brands," Mattress Firm CEO Ken Murphy said in the statement.
"Over the past year we have made multiple strategic investments that position us to build on our long-term vision to become the largest US vertically integrated mattress retailer.
"These investments included accelerating our national rebranding to the Mattress Firm banner, adjusting our merchandise offering to offer better value to consumers, and improving our organizational structure.
"With these initiatives behind us we are excited about the long-term profitable growth opportunities for our business," Murphy said.
Mattress Firm managed to secure the credit despite its parent group being investigated by German authorities over allegations that its management used off-balance sheet entities to hide losses.
Steinhoff’s share price plunged after it indefinitely delayed releasing its results for the year to end-September due to accounting irregularities and said it will have to restate its 2016 results.
Steinhoff’s share price declined a further 4.4% to €0.30 in Frankfurt on Friday, but managed to gain 2.4% to R4.68 on the JSE before it closed at 12pm for a four-day Christmas holiday.