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Lenders give Steinhoff’s Jooste more time to pay his debts

Lenders have given the ex-CEO until March 31, 2019 to repay the R959 million he owes.
Markus Jooste. Picture: Reuters

Banks granted Steinhoff International’s former chief executive officer, Markus Jooste, another extension to pay back his debt as the global retailer that he headed struggles to survive an accounting scandal that happened under his watch.

Jooste’s personal investment company, Mayfair Holdings, struck a deal with banks in March this year to sell assets of more than $2 billion to repay debt owed to the lenders by December. Lenders and other creditors have now agreed that Jooste, 57, has until March 31, 2019, to repay his debts, Stefan Potgieter, Mayfair’s sole director, told some stakeholders in an email seen by Bloomberg. Potgieter confirmed the extension.

“We continue to enjoy the support of our creditors for an orderly process in the interest of all stakeholders, which might include further postponements of deadlines, if needs be,” wrote Potgieter, who is also Jooste’s son-in-law.

Mayfair’s biggest asset is candymaker Lodestone Brands. The founders of the company, whose brands include Rascals candies and Champion toffees, remain minority shareholders and are considering making an offer to buy back the business, said people familiar with the situation, who asked not to be named because this hasn’t been publicly announced.

Such an offer would cover the R959 million in debt owed to Mayfair’s three main lenders — Sanlam, Investec and Absa Group, according to the people , declining to say how much the minorities would propose paying.

After Steinhoff shares crashed when it reported a hole in its accounts in December, Mayfair defaulted on its share-backed loans. That gave banks an option to liquidate the company or come up with a breakup proposal to release capital. While the three lenders agreed that the latter course would realize more value, there have been no significant disposals to date and the three banks continue to hold the debt on their books. Mayfair was also involved in horse racing.

“Any suggestion that we are not dealing with the matter in the usual manner by, for example, being unduly lenient to Mayfair is inaccurate,” said an Absa spokesman. “It is Absa’s intention to pursue the scheme-of-arrangement process, as well as any other legal remedies that may be available to it, until such time as all obligations owed by Mayfair to Absa are fulfilled.”

Investec and Sanlam confirmed that an extension has been granted.

Steinhoff’s stock has plunged about 95% since it announced on December 5 that Jooste is leaving the company and that the global retailer’s accounts will be investigated. The former CEO told a parliamentary hearing earlier this month that the origin of Steinhoff’s near collapse was a protracted dispute with a German partner, denying knowledge of any financial irregularities. The company has said it reported Jooste to a South African police unit.

Read: Steinhoff: ‘One guy couldn’t have done it’

© 2018 Bloomberg L.P

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“Lenders have given the [the] ex-CEO until March 31, 2019 to repay the R959 million he owes.”

Oooof! And I thought I had worries…

PS. Also, Loni, there are 2 “the’s” in the subtitle above.

When you owe just short of a billion rand, you don’t have worries – the bank has worries!

Eish, ja. You are right! 😀

Unlike you MrG9000, he has assets of more than $2 billion he can sell to repay debt and still remain with a healthy chunk of wealth still…

Boombang:

Correction. He maybe HAD assets of two billion dollars until the bottom fell out of the assets’ valuations. What is not taken by the Mayfair banks will be taken by lawsuits and asset forfeiture unit and SARS and SARB in fines for a few dozen contraventions.

But at least his girlfriend still has the Bentley

How does any institution think that lending an individual R2b ( of other people’s money) is ok? No wonder so many investors were herded unwittingly into owning Steinhoff shares in their portfolios….I doubt that these same investors will see anything of their money when MJ has paid back what he owes! Investec and Sanlam will keep it all as fees! Disgusting.

I suppose Simply Asia is lining up to buy the horses …

Are they opening an outlet in Franschhoek?

Hahahaha funniest comment I’ve read on Moneyweb @ Pamplona

End of comments.

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