Steinhoff’s future hung in the balance yesterday after shareholders of the retail holding firm voted against the debt restructuring deal, substantially raising the prospect of liquidation.

A Business Day report says under the deal, shareholders would have left with 20% in an unlisted vehicle while debt holders would take 80% of the firm and extended the debt repayment date for three years.

Shareholders were told there was no guarantee the 20% would have any value but it was their best hope.

However, 61.45% of shareholders voted against the deal at a shareholder meeting in Amsterdam yesterday afternoon.

Steinhoff warned beforehand that such an action would leave them with no stake at all in the company.

The outcome of the vote could herald the end of Steinhoff, which has been touch and go for more than five years after revealing multibillion-rand accounting fraud, which triggered a selling frenzy in its shares and attracted the hedge fund investors in its debt as risk-averse traditional lenders fled. 

Steinhoff, which is registered in the Netherlands, is labouring under €10bn (or almost R200bn) debt pile due in June that it cannot pay.

It now will either go into a Dutch court-type procedure called WHOA (Court Approval of a Private Composition Prevention of Insolvency) Act used to avoid bankruptcy and come to an agreement with creditors.

Or creditors, mostly hedge funds, will take what is owed to them in June. Steinhoff, which owns 44.5% of Pepkor and 75% of European discount retailer Pepco as well as stakes in US Mattress Firm and Greenlit brands, an Australian furniture seller, has €3.5bn in negative equity, meaning its debts exceed its assets by €3.5bn.

Full Business Day report