Steinhoff stock leaps as creditors support debt plan
Steinhoff has received the necessary creditor support for its three-year debt standstill plan, which is aimed at providing the board with time to implement a restructuring of the group’s crippling €9.4bn debt. News of the support saw the Steinhoff share enjoy its strongest one-day gain in seven months as the share price surged 18.67% to close at R3.56 on Thursday. The debt restructuring provides shareholders with some prospects for recovering part of the value that was wiped out after the December 6 2017 announcement of the discovery of accounting irregularities within the group, which took 90% off the share value. However, analysts say the recovery will be limited. The steep level of debt combined with hefty interest payments could see the group face a debt burden of about €14bn at the end of the three years. Debt-for-equity swap On Thursday, an analyst said a debt-for-equity swap was inevitable, with creditors being offered shares in exchange for their debt. “I don’t see how they ...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.