Steinhoff International Holdings NV chairman Christo Wiese, seeking to stabilize the embattled retailer, is negotiating a standstill agreement on a 1.5 billion euro (US$1.77 billion) margin loan under which banks would suspend the sale of stock until next year, people with knowledge of the discussions said.
The owner of Mattress Firm in the US and Poundland in the UK needs a lifeline after its stock plunged last week when it delayed publication of its financial results because of possible accounting irregularities that prompted the resignation of its chief executive officer.
Wiese, a South African billionaire who is Steinhoff’s biggest shareholder, is stepping up efforts to save the company, which owes creditors as much as US$21 billion.
The shares rebounded slightly early yesterday after Steinhoff said it appointed Moelis & Co to handle discussions with lenders and AlixPartners LLP to advise on “liquidity management and operational measures.”
Last year, Wiese pledged 628 million of Steinhoff’s shares in collateral to borrow money from Citigroup Inc, HSBC Holdings PLC and Nomura Holdings Inc, a company statement said.
That was to participate in a share sale in conjunction with Steinhoff’s acquisition of Mattress Firm and Poundland, the statement added.
The banks are considering waiting until the publication of Steinhoff’s audited results, said the people, who asked not to be identified because the plan is confidential.
An accord could come as early as this week, the people said.
A spokesperson for Wiese declined to comment.
Steinhoff’s shares were up as much as 24 percent in early trading in Frankfurt, where the company has its primary listing.
Last week’s freefall wiped out a majority of the net worth of Wiese and an investment by Public Investment Corp, which manages the pension funds of South African government workers.
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