DURBAN - STEINHOFF International rose nearly 6 percent on the JSE yesterday morning after the troubled retailer received support from four large active claimant groups (ACGs) for the implementation of its proposal to resolve multi-jurisdictional legacy litigation against it.
The group said that the four active claimants represented market purchases based in South Africa and abroad.
It said the four, Burford Capital LLC, Deminor Recovery Services, SA/ DRS Belgium SC and DRRT/Therium had promised to recommend that their respective constituents accept the group’s July 2020 global settlement proposal which was further revised early this year.
The claims against Steinhoff stem from a December 2017 accounting scandal which led to a 95 percent collapse in its share price and shed more than R200 billion in market capitalisation, leading former chief executive Markus Jooste to resign.
The Steinhoff global settlement proposal is implemented under the Dutch suspension of payments (SoP) which commenced on February 15 and the S155 proposal under South African law. “Any litigation initiated by these ACGs against Steinhoff and its former directors and officers will be suspended immediately.
“After the successful implementation of the Dutch SoP and the S155 proposal, this litigation will be terminated,” the group said.
Steinhoff share price rallied to a month-high of R2.47 from Tuesday’s closing price of R2.26 after receiving support from the ACGs.
Steinhoff’s global settlement proposal is also backed by one of the claimants in the form of the European
Investors-VEB in July last year.
This comes after Steinhoff offered €943 million (R4bn) last year to settle legacy claims against it and said it could face liquidation if the claimanants refused to accept the proposal.
The group made available an amount of R6.54bn as total settlement consideration to market purchase claimants and contractual claimants at the beginning of the month.
Steinhoff is also facing claims from its financial creditors.
Last week Steinhoff reached an agreement of up to €78.1m with some of its former directors and officers who worked for or had been associated with it to settle legacy claims against it.
Its former auditing firm Deloitte also contributed €77.94m to help in the global settlement in February.
However, the former directors, officers and Deloitte stressed that they do not in any way admit liability for the losses incurred by Steinhoff by agreeing to contribute or participate in the proposed global settlement.
The group said it would provide updates in respect of implementation of the global settlement in due course.
Steinhoff shares closed 3.54 percent higher at R2.24 on the JSE yesterday.