Steinhoff asks for €200m life support fund

Steinhoff Group, owner of UK retail chains Poundland, Harveys and Bensons for Beds has apparently started talks with lenders with the objective to obtain a €200m (£176m) life-line, known as “interim liquidity support” to prevent the international conglomerate from total collapse.

The South African based retail giant, which has been at the centre of an accounting scandal since December, is reportedly in talks with banks to secure funds to support its European operations alongside a temporary waver of its debt agreements.

Read - Poundland owners shares collapse due to accounting irregularities

South African banks have already pledged €60 million (£52 million), but Steinhoff cautioned investors that “there can be no assurance that the company will be able to reach agreement with its finance providers on acceptable terms or at all”. The company also added that it would probably need further external liquidity in the future, stating so far it had not been able to secure the funds.

It has also requested a temporary waiver on credit agreements, though it did not reveal a time frame of size of the loans in question. Steinhoff told creditors that it expected to be able to meet interest payments on its £9.4 billion debt pile, though not at penalty rates.

In the last month, their shares have collapsed to only 20% of their current price, wiping almost £9 billion off the value of the company.

Source: Insight DIY Team

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