Further information will be contained in the CVA Proposal which when published, will include an anticipated timetable and will also contain instructions for SEAG creditors on the actions which they will need to take. A further announcement will be provided upon publication of the CVA Proposal.
Launch of Consent Solicitations in respect of SFHG issued convertible bonds
The Company has today launched Consent Solicitations in respect of the three series of outstanding SFHG issued convertible bonds due 2021, 2022 and 2023. Bondholder meetings for each series of bonds will, pursuant to the terms of the Consent Solicitations, be convened for holders to consider the extraordinary resolutions proposed by the Company. The date for those meetings has not yet been fixed. Each such extraordinary resolution includes the following key proposals:
- the restructuring of the convertible bonds as new indebtedness in the form of guaranteed secured loans with a three-year maturity and PIK interest terms. It is proposed that the loans so extended by holders of the convertible bonds due 2021 and 2022 would be restructured into a single loan facility and that the loans so extended by the holders of the convertible bonds due 2023 would be restructured into a separate loan facility, each with a new Luxembourg incorporated entity as the borrower. The 2021/2022 and the 2023 loan facilities will rank pari passu at borrower level;
- These loan facilities will benefit from deferred contingent payment instruments from in the case of the 2021/2022 loan facility, the Company and Steinhoff International Holdings Pty Ltd and in the case of the 2023 loan facility, the Company, reflecting the guarantor structure in relation to each existing series of convertible bonds;
- the new restructured indebtedness will take the form of private loan facilities and the convertible feature of the existing convertible bonds will be removed; and
- to facilitate completion of the financial restructuring, an interim moratorium will, subject to approval of SFHG's creditors of the Consent Solicitations, come into force from the date of such approval and will have the effect that SFHG's creditors will be prohibited from taking certain enforcement action against SFHG or the Company from such date until the implementation of the financial restructuring or the termination of the Consent Solicitations.
It is expected that detailed supporting documents for the Consent Solicitations will be provided to bondholders in due course to assist bondholders in considering the extraordinary resolutions. A further announcement will be provided once such long form documents have been circulated.
A requirement in respect of each of the CVA and Consent Solicitations processes is that completion of both exercises will be inter-conditional with each other.
Update on SUSHI Scheme
The Company refers to its announcement of 13 November (the "13 November Announcement") in respect of the SUSHI Scheme (as defined in the 13 November Announcement) having been sanctioned by the High Court of Justice in England and Wales. The Scheme Sanction Order was recognised in proceedings under chapter 15 of title 11 of the United States Code by the United States Bankruptcy Court for the District of Delaware on 13 November 2018. The Scheme Sanction Order (as defined in the 13 November Announcement) was lodged with the Registrar of Companies (within the meaning of the Companies Act 2006, as amended) on 16 November 2018, and the SUSHI Scheme was implemented in accordance with its terms.
Extension of LUA
The SUSHI Scheme having become effective and the CVA Proposal and Consent Solicitations processes having been initiated, the LUA is extended to 20 February 2019.
The Group restructuring otherwise continues in accordance with the terms of the LUA and the Company will continue to provide updates as appropriate.
Shareholders and other investors in the Company are advised to exercise caution when dealing in the securities of the Group.
Stellenbosch, 19 November 2018