South African furniture group Steinhoff International has secured a €774 million ($1.25 billion) term loan facility for its subsidiary Hemisphere International Properties.

The newly secured Hemisphere loan facility will mature either three years after the date on which the financial indebtedness of Steinhoff Europe AG and Steinhoff Finance Holding is effective, or December 31, 2021, whichever is earlier.

Steinhoff has been making progress on driving down its massive debt. It secured investor support to enter a lock-up agreement in July, which will provide extra time to implement the debt restructure.

Group representatives recently briefed the South African parliament on the progress that has been made in reducing this debt and noted that the group has successfully repaid €2 billion ($3.24 billion) of the South African holding company’s debt.

Former CEO reveals origins of Steinhoff debt

While the company has been working down its debt, former Steinhoff International chief executive Markus Jooste has blamed the debt on an unfavourable joint venture with Dr. Andreas Seifert in 2007.

Jooste told the South African parliament that the venture was a “big mistake” and led in large part to the company’s woes after it was unable to complete financial statements in time due to financial losses and the perception of accounting irregularities.

The joint venture was terminated by Steinhoff in 2015, and the two parties have been embroiled in litigation until this week, when Steinhoff agreed to sell its share in the POCO furniture business to entities controlled by Seifert for €270 million ($436.8 million).

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