STEINHOFF INTERNATIONAL HOLDINGS N.V. - Update On Progress Of Financial Restructuring
22 January 2019 7:05
SNH SHFF 201901220001A
Update On Progress Of Financial Restructuring

Steinhoff International Holdings N.V.
(Incorporated in the Netherlands)
(Registration number: 63570173)
Share Code: SNH
ISIN: NL0011375019

Steinhoff Investment Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1954/001893/06)
JSE Code: SHFF
ISIN: ZAE000068367

UPDATE ON PROGRESS OF FINANCIAL RESTRUCTURING
Steinhoff International Holdings N.V. (the "Company" and with its subsidiaries, the "Group")

Introduction
In accordance with the Company's reporting obligations under paragraph (e) of clause 20 of
the lock-up agreement between, among others, the Company, Steinhoff Europe AG ("SEAG"),
Steinhoff Finance Holding GmbH ("SFHG"), Stripes US Holding, Inc. ("SUSHI") and certain
creditors, dated 11 July 2018 (the "LUA"), please see below the monthly update on progress in
connection with the corporate and capital restructuring of the Group's European business (the
"Restructuring").

Defined terms used but not otherwise defined in this report shall have the same meaning as in
the company voluntary arrangement proposed in relation to SEAG (the "SEAG CVA") and/or
the company voluntary arrangement proposed in relation to SFHG (the "SFHG CVA") (as
applicable and as the context dictates).

This report should be read in conjunction with recent market announcements (available at
www.steinhoffinternational.com/sens.php), including the most recent monthly update issued
on 21 December 2018 (the "December Update"). Following a period of intense activity leading
up to the meetings in respect of the SEAG CVA and SFHG CVA on 14 December 2018, as
reported in the December Update, there is less to report than in some previous updates
following the Christmas and New Year break.

Update on Restructuring and creditor support
The SEAG CVA and the SFHG CVA were both approved by significant majorities of their
respective creditors and by their members at meetings held on 14 December 2018. The SEAG
CVA documentation and SFHG CVA documentation can be downloaded at www.lucid-
is.com/steinhoff.

On 10 January 2019, SEAG was notified of an application issued by LSW GmbH ("LSW"), a
company claiming to be a creditor of SEAG, challenging the SEAG CVA (the "Application").
Aside from the Application, no challenges were received to the SEAG CVA within the
challenge period (i.e. the period of 28 days beginning on the day on which the SEAG CVA
Chairman's Report was filed at the Court). No challenges were received to the SFHG CVA
within the challenge period (i.e. the period of 28 days beginning on the day on which the SFHG
CVA Chairman's Report was filed at the Court). As the challenge periods have now expired,
no further challenges are permitted.

The potential LSW claim is described in and, should the claim be finally determined or resolved
in LSW's favour, is addressed by the terms of the SEAG CVA. LSW alleges that as at 14
December 2018 the total sum owed to LSW (inclusive of interest and costs) amounted to
approximately €291.4m. The Application seeks to challenge certain provisions of the SEAG
CVA and related matters.

Certain relevant terms of the SEAG CVA and the SFHG CVA, including the interim moratoria,
continue to apply. The Company continues to work towards the implementation of the
financial restructuring of the Group and management continues to support and focus on the
ongoing operations.


Head office liquidity
As previously reported in the December Update, the Company continues to actively monitor
cash flows and manage other liabilities (including contingent claims, tax and bilateral facilities)
as well as funding needs that may arise at the subsidiary level. The South African business
remains self-funding whilst the Pepkor Europe (including Poundland) business continues to
benefit from strong levels of liquidity. Mattress Firm is self-supporting following the emergence
from chapter 11. As indicated in the December Update, SEAG has provided a secured short-
term funding facility to Conforama to provide working capital support to the Conforama
group.

Update on Group governance
The onboarding process between the Group and the four candidates identified for the Newco
3 board and the boards of the key intermediate holding companies in the SEAG group is
ongoing. The Group expects to announce the candidates publicly prior to the Restructuring
Effective Date. As previously reported in the December Update, the Newco 3 board will
include two directors nominated by the Company. Those two initial directors are expected to
be Louis du Preez and Theodore de Klerk.

As previously indicated, Danie van der Merwe stepped down as the Group's Chief Executive
Officer on 31 December 2018; Louis du Preez was appointed Group CEO immediately into this
role thereafter.
Group structure
Pursuant to the SEAG CVA and the SFHG CVA, Lux Finco 1 and Lux Finco 2 were incorporated
on 28 December 2018.

Financial statements
The Company currently anticipates publishing its Group audited financial statements for 2017
and 2018 by 18 April 2019, subject to any delay caused by the challenge to the SEAG CVA.

The Company expects to publish its unaudited quarterly update for the three months ended
31 December 2018 in line with the usual reporting timetable (i.e. by 28 February 2019).

Corporate finance
On 11 January, the sale of Steinpol, a non-core manufacturer of entry level to mid-price
upholstery operating eight factories in Poland and one factory in Hungary, was agreed. The
enterprise value for the business amounts to €26.5 million of which €9 million is deferred
consideration. Closing is expected on or around 31 January 2019 and is subject primarily to
merger control clearance.

Current management priorities
The key priorities for the management team currently include:


   •   Resolving the challenge received to the SEAG CVA;


   •   Satisfying the various conditions precedent contained within the SEAG CVA and SFHG
       CVA and otherwise planning for the implementation of the Restructuring;


   •   Working with the prospective members of the new management boards to assist their
       familiarisation process with the SEAG group and its restructuring;


   •   Maintaining stability across the Group and managing the ongoing operations of the
       Group, including actively monitoring cash flows, supporting operating performance,
       managing other liabilities and funding needs that arise at the operating company
       level;


   •   Finalising the 2017 and 2018 Annual Financial Statements;


   •   Assisting PwC with the ongoing investigation into accounting irregularities together with
       other work required to progress and finalise the restatement of accounts;


   •   Monitoring and defending any litigation claims brought against the Group and
       identifying and pursuing recoveries where available; and
   •   Engaging with the wider stakeholder group and regulators.

Shareholders and other investors in the Company are advised to exercise caution when
dealing in the securities of the Group.

JSE Sponsor: PSG Capital
Stellenbosch, 22 January 2019

Date: 22/01/2019 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.