Steinhoff International Holdings has already started losing credit lines from banks and the firm was still not able to guarantee the severeness of the accounting irregularities which resulted in $10 billion wipes of the company’s market value just a few days after the Steinhoff scandal surfaced. The South African company which as once a competitor to IKEA for a global market share, has called upon for support from the company’s creditors during a meeting held in London as Steinhoff struggles to grasp at the largest scandal in history.
During the meeting, Steinhoff prepared a presentation to explain that certain credit facilities were withdrawing themselves or being suspended, while insurers were also reducing credit insurance or completely canceling it. The company stated that they will need support from creditors to maintain stability, this includes support from Commerzbank AG from Germany.
The lack of clarity on the company’s finances has caused the shares to collapse drastically, identified in Frankfurt and Johannesburg since the scandal was first disclosed and described as having a hole in the balance sheet. After the incident surfaced, the shares fell 20 percent further as the state of the problem still remains unclear.
The South African company owns Mattress Firm U.S, Poundland in London, and also Conforama in France, has released a statement on 7th of December that there was $2.36 billion missing on the balance sheet. Steinhoff news showed that the company is currently in €10.7 billion in debt, where roughly €690 million abstract facilities have already rolled over. The company also has three convertible bonds that are worth €2.7 billion.
Creditors have already begun employing advisors to help arrange their next plan. The €800 million holders in bonds that were issued by Steinhoff and other private companies in Germany has considered joint action as well.