Picture: SUPPLIED
Picture: SUPPLIED

Steinhoff on Monday announced key terms for its French unit Conforama’s plan to raise €316m (R5bn) to shore up its finances after sales fell and costs rose.

Steinhoff said the financing included the issue of warrants in an amount equal to 49.9% of Conforama’s shares to the providers of cash, giving the financiers enhanced governance rights and allowing them to appoint two independent directors to Conforama’s board.

The financing also includes call protections — a security measure which imposes penalties if a loan is repaid earlier than its maturity date.

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Steinhoff in December 2017 admitted accounting irregularities, erasing about 85% of its market value and throwing it into a liquidity crisis.

The company said in a presentation to lenders posted on its website last week that Conforama would get the money on Monday.

Steinhoff deputy CEO Alexandre Nodale stepped down last week, but promised to stay on as the CEO of Conforama until the company finalises its long-term financing.

Reuters