Hi Steinfighters,
Today is D Day.
I hope for a good outcome for all real investors who have been completely cheated here on December 15, 2022 by the management of this company. Yes, cheated with lies. Why? Because what did the CEO, Mr. Louis Du Preez, say a few more months before December 15, 2022, namely in March 2022 during the AGM?
AGM maart 2022: https://www.steinhoffinternational.com/downloads/2022/2022%2520AGM%2520Presentation.pdf page 32
Many of the risks associated with Steinhoff have been resolved
Significantly reduced risk profile
•The underlying operations are performing well •Focus is now on restructuring the terms of the debt: -Extend the due date past 2023
Page 20 : Sufficient cash flow to continue in operational existence in foreseeable future
-Reduce the interest rate payable in line with the reduction in the risk profileo
-Reduce the absolute level of debt when opportune
Minutes AGM March 2022:
https://www.steinhoffinternational.com/downloads/2022/Final-Minutes-Steinhoff-AGM-2022.pdf
Page 10 2.8.Mr. Du Preez reiterated that the global litigation settlementhad always been an important commercial imperative which had now been achieved, and which opened the way for greater focus on step three of the Company’s strategy.
2.9.Mr. Du Preez concluded by stating that the outcome after four years was that the Company managed to have corporate funding secured with payment-in-kind interest until 30 June 2023, with an option to extend the maturity for another six months by a simple majority of the lenders. The Group now had four main operations: Pepco, Pepkor, Mattress Firm and Greenlit Brands. The global litigation settlement had been delivered and various regulators’ investigations had been completed. Lastly, the Company was in the process of finalizing the last settlements with the various regulators.
Page 11: VERY IMPORTANT! 2.12.In respect of the basis of preparation of the financial reportingMr. De Klerk highlighted the going concern assumption, requiring management to make a judgement at the time of finalizing the financial report regarding the likelihood of success of the litigation settlement.
Management's view had been that it was more likely than not to succeed. A judgement had to be made regarding the value, even though there were still settlement negotiations with certain parties ongoing. He confirmed that a provision of onepointfiveseventhree billion euro (€ 1.573billion)had been raised in that regard. Further, management had to consider the debt maturity. At that stage, an interim debt extension was in place. However, subsequent to the effective date of the litigation settlement, the debt maturity would be extended further. COVID-19considerations had played an important role at all the OpCos. Mr. De Klerk drew the attention to the Group's total liabilities exceeding its total assets, but noted that the assets were recorded at book value and not at fair value. The current assets, however, exceeded the current liabilities, and the Group had sufficient cash flow to continue in operational existence for the foreseeable future.Mr. De Klerk confirmed that the OpCoswere independently funded and did not rely on the Group forfunding.
Pepkor had issued further bonds in an amount oftwo point two billion rand (ZAR 2.2 billion) at a more favourable interest rate than its existing financing.
Page 13 2.18.Mr. De Klerk referred to the outlook for the year ahead. In his view the Group’s businesses were operationally in a very good position in terms of management and market position.
Thefirstmatterwas the going concern assessmentin respect whereof management had considered the impact of the provision for the litigation settlement proposal, the extension of the maturity date of the debt and the impact of COVID-19. The Management Board expressed that it had reasonable expectation that the Group had sufficient resources to continue operations in the foreseeable future, which was not less than twelve months from the signing date of the consolidated and separate Financial Statements. The second matter was the control conclusion on certain entities which was similar to the previous year
page 16-18
he mentioned Mattress Firm that had performed exceptionally wellin the past year and continuedto do so. Mr. Schwab had asked when a potential IPO of Mattress Firmwas planned?Mr. Du Preez replied by assuringthat the Mattress Firm business was IPO-ready, however, the Group would continue to monitor the financial markets and would investigate all options.He emphasized that no final decision on how to unlock value for stakeholders through that business had been made yet.
Page 18: about delisting!!! 2.32.Mr. Soontornvipat asked if there were any efforts to suspend the existing listing on the JSE, especially since listings on the stock exchanges were associated with costs and trading on the JSE had only marginal turnover?Mr. Du Preez responded by stating that the Company intended to retain the listings both on the FSE and the JSE despite the costs involved. That was because firstly,by retaining the listings,the Company reward edits current shareholders by enabling them to trade in the shares.In his view the volume of shares that traded on the JSE and the FSE on a monthly basis were quite acceptable. Secondly, by retaining the listings,optionality would be retained for potential corporate restructurings, as management set out to implement step three of the Company’s three-step restructuring strategy
2.33.Mr. Du Preez explained that management’s current focus was on restructuring the terms of the debt, which entailed:(i)extending the debt past the 2023 due date;(ii) seeking to reduce the interest rate payable in line with the reduced risk profile, and (iii) aiming to reduce the absolute levels of debt. He further explained that those goals could be achieved by further asset sales at anopportunetime, and by potentially considering optionality around equity. Mr. Du Preez referred to the proposals for authorisations in respect of Sharesthatwere on the agenda of theAGM. He emphasized that currently there were no fixed plans to issue any new equity, but that the proposals had been put forward for approval so management would retain some flexibility in the event that there would be anypossible future equity plans. Mr. Du Preez assured that the Company would carefully consider any plansto make sure that the interestsof its current shareholders be taken into account
Note: did we listened to the 'Fabeltjeskrant' or what? Anyway, I hope for a Cool Down 3 or 4 months and the appointment of a "Herstructureringsdeskundige'. Because then we have a deep investigation in this crimi acts of this company and a freeze down of the maturity date. I wish us good vibrations, all the best from Jaap and as always:
STAY TUNED!
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