South African furniture conglomerate Steinhoff International Holdings has seen the voluntary administration of its European arm blocked by a company “claiming to be a creditor”, according to a release sent to investors.
The company known as LSW GmbH – an entity reportedly related to Andreas Seifert, who, according to BusinessDay, currently has a dispute in the Austrian courts against Steinhoff Europe AG – lodged an application challenging the voluntary arrangement on the day it was announced.
As a result, the administration cannot be completed until the application has been settled, delaying Steinhoff’s restructuring plans.
While Steinhoff examines the details of the application, it noted it will continue to work towards the financial restructuring of the group while management focuses on the ongoing operations of the business.
Steinhoff had previously agreed to sell its share in the POCO furniture business to entities controlled by Seifert for $436.8 million (€270 million), after the two parties had been embroiled in litigation, since the furniture conglomerate had terminated the 2007 joint venture between the two.
Former chief executive Marcus Jooste recently called the joint venture with Seifert a “big mistake” in a South African parliament hearing, which led in large part to the company’s financial issues after the group was unable to complete its financial statements in time due to financial losses and the perception of accounting irregularities.
Steinhoff recently announced a delay in its 2017 and 2018 financial statements due to the PwC investigation into these accounting irregularities being “much more complex than initially anticipated.”
“We sincerely regret this revision to the reporting timeline,” Steinhoff chairperson Heather Sonn said.
“While substantial progress has been made, the volume and complexity of the work required, including the interactions between the various parties, has been significantly greater than initially anticipated … we continue to approach these projects with maximum effort and commitment as we seek to bring them to conclusion.”
The announcement saw shares fall as much as 21 per cent, but they were quick to normalise in the following days.
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