Steinhoff International raises new money to stabilise Conforama
The embattled retailer has raised about R5 billion.
Embattled retailer Steinhoff International said it will proceed to implement the financial restructuring of its French furniture retail, Conforama, unit by raising a total of about €316 million (R5 billion) to ensure the stability of its capital structure and operations.
Steinhoff said the French Commercial Court of Meaux has approved a conciliation agreement entered into between Conforama and its creditors, paving the way for refinancing negotiations to continue and be implemented.
“The key terms of the financial restructuring, which includes a total nominal value of €316 million new money financing (including undrawn and conditional commitments, funds to be available from closing expected 15 April 2019),” the company said in a statement.
As at the end of December, Conforama’s net financial debt was €1.72 billion (R27.3 billion), outstripping its equity.
“Conforama’s revenue has eroded between full-year 2016 and full-year 2018, while operating expenses have increased, driven by store opening plans, new marketing campaigns and numerous projects” that were started before Steinhoff disclosed accounting irregularities in December 2017, according to the statement.
In 2017, Steinhoff admitted to accounting irregularities, wiping about 85 percent off its market value.