Steinhoff’s restructuring plans were shelved after a large shareholder protection organization garnered sufficient support.
According to Moneyweb, on Thursday of last week, a shareholder group from Germany was identified as the primary opponent voting against all resolutions at Steinhoff’s annual general meeting.
The protection association for capital investors, Schutzgemeinschaft der Kapitalanleger (SdK), received enough proxies from disgruntled Steinhoff shareholders to defeat all proposed resolutions.
Due to the failure to pass the resolutions, Steinhoff will be unable to play for more time to repay large debts due within a few weeks.
Steinhoff management tried to convince minority shareholders that the agreement with large creditors to extend debt due dates was a good idea at the meeting.
The proposed agreement with creditors
The CEO of Steinhoff, Louis du Preez, and the CFO, Theodore de Klerk, reaffirmed the agreement’s primary justifications, including:
Since quite some time, the group’s total liabilities (€10.26 billion at the end of February 2023) have exceeded its total assets, and there is no realistic chance that this will change in the near future.
If no resolution is reached, the debt will become due and payable on 30 June 2023, and the group will default;
A default entitles the creditors to enforce their existing security interests on the group’s assets, and as a result, those investments can be sold in an enforcement sale, either individually or collectively.
This will likely result in an inefficient and disorderly enforcement process and lower sale proceeds; and Lower sale proceeds are not in the best interest of the company and its stakeholders, including shareholders, as it reduces the likelihood that the debt will be repaid in full, thereby increasing the company’s unpayable residual debt.
Nothing
In short, Du Preez and De Klerk attempted to warn minorities that they would receive nothing after that.
The minority groups were not persuaded.
It would appear that the SdK shareholders share a similar perspective.
No to directors’ remuneration
Sixty percent of shareholders voted against adopting the annual financial statements for the fiscal year ending September 2022, and nearly sixty-five percent opposed David Pauker’s reappointment as a supervisory director.
Not surprisingly, more than 67 percent of the advisory vote regarding the remuneration report for the previous fiscal year was against the proposal, indicating that shareholders are unhappy with directors’ pay.
Steinhoff stated that it still has auditors, as Mazars has already been appointed for the fiscal year ending in 2023. This resolution pertained to the fiscal year ending in September 2024.
READ MORE: Germany to prosecute Steinhoff’s Jooste for fraud next year
According to Steinhoff, the vote against adopting the financial statements does not have significant ramifications. It states, “This was also the case at our AGMs in 2019, 2020, and 2021.”
Steinhoff has stated that it is currently evaluating its options and will make a statement at the appropriate time.
