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Tekkie Town claimants reach settlement with Steinhoff

Steinhoff’s share price surges over 22% following the announcement.
Image: Waldo Swiegers/Bloomberg

Steinhoff International Holdings NV (SIHNV) confirmed on Wednesday that it has reached a settlement with the disgruntled “Former Tekkie Town Owner Claimants” – a move that is expected to see the claimants now supporting the crucial global settlement of the scandal-hit Steinhoff group.

The announcement saw Steinhoff’s shares surging over 22% on the JSE, to close at R3.15 a share.

Steinhoff noted in its Sens statement that as part of the Tekkie Town settlement deal, SAHPL (Steinhoff Africa Holdings Proprietary Limited) will “pay the Former Tekkie Town Owner Claimants R500 million in aggregate”.

In addition, SAHPL “will procure the delivery to the Former Tekkie Town Owner Claimants of 29.5 million Pepkor Holdings Limited [PPH] shares subject to a lock-up of 180 calendar days following transfer, in order to acquire control of all Steinhoff-related claims alleged by the Former Tekkie Town Owner Claimants and their related parties”.

Read: Markus Jooste loses key part of appeal against FSCA insider trading fine

“The Former Tekkie Town Owner Claimants will accordingly transfer control of all their Steinhoff-related claims to SAHPL, so that the claims between them, Steinhoff, PPH, directors and officers and auditors [including the Liquidation Application] can be settled and withdrawn on terms that enable SAHPL and Steinhoff to benefit from the compensation allocated to the Former Tekkie Town Owner Claimants under the SIHNV composition plan,” Steinhoff further noted.

“We are pleased to have reached terms with Steinhoff which will come into effect from the Settlement Effective Date of the Steinhoff global settlement proposal,” Tekkie Town founder Braam van Huyssteen said in Steinhoff’s Sens statement.

“We will be supporting Steinhoff to implement the settlement as soon as possible. We are satisfied with becoming a shareholder of Pepkor, and we are looking forward to concentrating on our businesses,” he added.

Steinhoff CEO and management board member Louis du Preez, commented: “[The] settlement with the Tekkie Town Applicants is another positive step towards conclusion of implementation of the Steinhoff global settlement. We continue to work towards the sanction of the SIHPL S155 Proposal by the Western Cape Court in January 2022.”

Meanwhile, formed Tekkie Town CEO Bernard Mostert (one of the claimants, together with Van Huyssteen and other former owners and management of the sports footwear retailer) confirmed in a separate statement that the settlement deal had been reached with Steinhoff Group.

“There are a number of factors that contributed to our decision to reach a settlement with Steinhoff and its subsidiaries, including Pepkor,” said Mostert.

“Foremost among these factors is that we are privileged to enjoy great momentum in our new business. An increased focus coupled with the proceeds of the settlement, and without the distraction of litigation, will enable us to amplify that momentum,” he noted.

Read: Mr Tekkie’s very colourful launch

“In little less than three years we have grown from zero stores to more than 160 stores and 800 wholesale accounts. With the litigation handbrake dropped, we can ramp up this business tremendously and significantly add to the almost 1000 jobs we have created since August 2018,” he added.

Mostert said that an equally important consideration was the fact that their “participation in the settlement will allow South African class action participants to share in the settlement proceeds and address to some degree the losses they suffered at the hands of the Steinhoff scandal”.

“This has been a matter of landmark and historic litigation and we hope that it will pave the way for legislation that will not hobble the man on the street’s ability to successfully participate in recovery processes of this nature.”

“To that end we respect Steinhoff’s final position to accommodate this class of claimant in the Steinhoff global settlement,” he added.

In as far as their relentless request and endless litigation to have control of the Tekkie Town business restored to them, Mostert said: “We were very happy to run this process to the very end as it was the most logical and rational remedy available to us. However, we have come to expect the unexpected. One such conclusion is that successful litigation and the return of control in the business would probably negatively impact the momentum that we enjoy in our current business.

“Hence our focus is now forward and we take pride in the fact that we have built one successful business and are now busy doing so for the second time.”

“Wherever Tekkie Town may go and wherever Pepkor may take it, we are proud that we delivered it in good shape, our journey in building it and fighting for it has shown how much we care for it and we wish them well taking it forward without us.”

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It must be hard finding a conference room big enough to fit all the egos in this soap opera. And all this, about cheap shoes, fugly furniture and expensive consumer credit.

End of comments.

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