Monday, 27 July 2020

South Africa's Steinhoff proposes $1bn settlement to solve legal disputes



South African retailer Steinhoff International said on Monday it had proposed a settlement worth up to around $1 billion (778.33 million pounds) 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 scandals 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 ($311.35 million) for market purchase claims, with contractual claimants to be offered around €104 million and a further ZAR9.4 billion ($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, a Steinhoff subsidiary if the settlement is given the consent of creditors, regulators, and eligible claimants, Steinhoff said.

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