Andreas Seifert puts the kibosh on Steinhoff’s salvage operation
The furniture group’s business rescue proposal to creditors has been delayed by a legal challenge from LSW
Steinhoff International’s salvage attempt has been stymied by an entity related to its old nemesis, Andreas Seifert, called LSW.
In a statement released on Thursday, Steinhoff described LSW as “a company claiming to be a creditor” that is challenging its proposed business rescue plan.
Steinhoff responded to an earlier version of this article saying it “would like to highlight that LSW GmbH referred to in the company announcement is in fact an entity related to Andreas Seifert who has a dispute ongoing in the Austrian courts against Steinhoff Europe AG.”
Seifert, who sold half of his furniture chain Poco to Steinhoff, has sued the group over various issues in different jurisdictions.
German courts in April ordered Steinhoff to reverse its partnership with Seifert, but this does not appear to have ended the litigation.
Steinhoff said that under the terms of the company voluntary arrangement (CVA) it proposed on December 14 2018, it cannot proceed with this plan until LSW’s challenge has been resolved.
“The company continues to work towards the implementation of the financial restructuring of the group and management continues to support and focus on the ongoing operations,” Steinhoff said.
When announcing the voluntary arrangement in December, Steinhoff’s commercial director and CEO designate Louis du Preez said: “The agreements reached today with creditors of the group’s key finance companies are key to bringing in a new period of financial stability for the group and enabling management to focus on maximising the potential of the group’s various businesses.
“On behalf of the management board I would like to take this opportunity to thank everyone concerned for the tremendous efforts involved in reaching this critical milestone in the restructuring of the group’s financial indebtedness.”
Thursday’s statement gave no reasons behind LSW’s challenge, only saying it is “currently examining the detail of the application and will provide further updates as appropriate”.
Steinhoff shares suffered a 93% crash in 2017 after informing shareholders in December that its auditors refused to sign its interim results because of fraud, which prompted the immediate resignation of CEO Markus Jooste and the subsequent departure of chair Christo Wiese.
Its share price continued to slide in 2018, falling 63% over the year.
Correction: June 12, 2018
An earlier version of this article said LSW was German steel supplier Lech-Stahlwerke. Steinhoff investors relations clarified the LSW GmbH referred to in the company announcement is in fact an entity related to Andreas Seifert.