Steinhoff races to avoid cash crunch at subsidiaries
‘Originally the idea was that a lot more money would be raised at group level…. But it is clear these businesses don’t trust the group’
Frankfurt/Munich/London — South African furniture retailer Steinhoff is racing to plug a €200m funding gap in the next few days to avoid a small unit such as Austrian Kika-Leiner pulling down the entire group, sources close to the negotiations said. Steinhoff last month admitted "accounting irregularities" as it built a debt-fuelled empire stretching from Poundland in Britain to Mattress Firm in the US. The admission wiped about $15bn or 85% off its market value. Its two top executives, who turned the group from a modest German furniture distributor into a global household goods giant, have resigned, as has its chairman, and the group is currently being run by an acting chief executive while its former finance chief works full-time on securing financing. In talks with creditors, Steinhoff had conceded it has a funding gap of €550m, the sources said, adding that deals that had already been struck or were imminent brought the total down to about €200m. Talks with banks and other poten...
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