Markets

S.Africa's Steinhoff proposes $1 bln settlement to solve legal disputes

Credit: REUTERS/MIKE HUTCHINGS

South African retailer Steinhoff International said on Monday it had proposed a settlement worth up to around $1 billion to settle a stream of legal claims against it following a massive accounting fraud.

Steinhoff battling to recover from accounting fraud

Facing lawsuits worth billions of dollars

Settlement sees company offering around $1 bln in total

Deal needs creditors, regulators and claimants to agree

Adds details, quote

JOHANNESBURG, July 27 (Reuters) - South African retailer Steinhoff International SNHJ.J said on Monday it had proposed a settlement worth up to around $1 billion to settle a stream of legal claims against it following a massive accounting fraud.

Lawsuits worth billions of dollars are now the biggest challenge facing Steinhoff, which is battling to recover from the impact of the $7 billion scandal after first revealing holes in its accounts in December 2017.

CEO Louis du Preez said the settlement being proposed was the result of 12 months of "intensive effort" and urged all claimants to support it.

"Although there is no certainty yet that we will be able to conclude this settlement, in our view these terms are firmly in the best interests of all stakeholders," he said in a statement.

The settlement splits claimants into two groups: those with claims related to market purchases and those with contractual claims. Steinhoff said not all claims against it are covered in the settlement.

It offers 266 million euros ($311.35 million) for market purchase claims, with contractual claimants to be offered around 104 million euros and a further 9.4 billion rand ($568 million) for claims against a subsidiary - just over $1 billion in total.

The value would be paid in both cash and shares in retailer Pepkor PPHJ.J, a Steinhoff subsidiary, if the settlement is given the consent of creditors, regulators and eligible claimants, Steinhoff said.

($1 = 0.8543 euros)($1 = 16.5507 rand)

(Reporting by Emma Rumney; editing by Olivia Kumwenda-Mtambo and Jason Neely)

((Emma.Rumney@thomsonreuters.com; +27115952832;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

World Markets

Latest Markets Videos

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More