Long wait for payouts if Steinhoff is liquidated

Shareholders who instituted claims against Steinhoff will probably only receive payments from 2031 if the company is liquidated. A report in Die Burger says this scenario is detailed in an explanatory note from the company that had to be issued to seek support for its proposed court-sanctioned scheme of arrangement to settle claims. Steinhoff International Holdings NV, incorporated in the Netherlands, will be seeking approval on 15 December. If the majority of creditors support the scheme of arrangement, it could become enforceable against all creditors if the UK courts sanction it. If it fails, shareholders were told, a liquidation of the company is the alternative. An analysis of this scenario predicts a return of 3.7 cents per euro, and only after a decade.

American company Conservatorium, one of the creditors, will oppose the scheme of arrangement. According to another report in Die Burger, Conservatorium says it is opposed to the scheme as Steinhoff is allegedly giving preferential treatment to Christo Wiese, formerly chairperson and largest shareholder in Steinhoff. In September, Conservatorium successfully intervened in a claim before the Western Cape High Court in which Wiese-related companies are suing Steinhoff for losses he suffered when the Steinhoff share price collapsed. Conservatorium represents seven banks which advanced large amounts to the company, Upington, and which received Steinhoff shares as security for the loan. Conservatorium argues that Upington rather than the Wiese companies are entitled to claim for losses. In the first Steinhoff settlement proposal, Steinhoff said it would set the disputed amounts aside until Wiese and Conservatorium finalised their court battle in Cape Town. However, in the scheme of arrangement proposal, the claim by the Wiese companies would be paid out to those companies regardless of the outcome of the Western Cape court case.