FTI Consulting Helps Steinhoff Creditors Preserve Value

When faced with a fraud accusation, executive departures and liquidity issues, Steinhoff’s creditors looked to FTI Consulting to provide clarity on trading performance and help preserve value through a restructuring.

Situation

Steinhoff is a South Africa-based retail conglomerate with 12,000 retail outlets, 130,000 employees globally and well-known brands such as Mattress Firm, Poundland, Pepco and Conforama.

In December 2017, Steinhoff announced an investigation into accounting irregularities and the resignation of the CEO, and also warned against the recoverability of €6 billion of assets outside of South Africa. The Group’s share price plummeted by over 80% (losing €14 billion of market cap), and credit lines began to be withdrawn at the Group’s operating companies, resulting in significant operational and liquidity pressure.

Steinhoff urgently needed new money and sought relief from its creditors in respect to £10 billion of debt. Steinhoff was at a critical inflection point that would determine the future of its business.

Our Role

FTI Consulting was appointed Financial Advisor to the Co-ordinating Committee of the Group’s creditors to provide a common information platform regarding independent reviews of Group operating companies, as well as financial advisory services in what developed to be a highly complex multi-jurisdictional debt restructuring involving four distinct restructurings, multiple creditor constituencies, Chapter 11, COMI shifts, CVAs and Schemes of Arrangement. FTI Consulting’s team mobilized in a global and coordinated effort to provide lenders with clarity on Steinhoff’s true trading performance, offer a clear opinion of the future trading prospects and deliver a robust restructuring plan that provided a stable platform to restructure the Group’s debt and deliver a solvent solution to return value to lenders.

Impact

After providing the analysis and advice to creditors, FTI Consulting was the architect of the restructuring. FTI Consulting drove the restructuring implementation and negotiation, which resulted in over 90% of creditors (100+ financial institutions) locking in to a restructuring agreement within six months.