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Allen & Overy advises as global retail giant Steinhoff completes its EUR9bn restructuring

 

19 August 2019

​Allen & Overy has advised an ad hoc group of Steinhoff Europe AG creditors on the restructuring of the Steinhoff group. The Steinhoff group, which owns a portfolio of retail brands across Europe, Africa, the United States and Australia, was thrown into disarray in December 2017 following a series of announcements by its parent company, Steinhoff International Holdings N.V., regarding accounting irregularities within the group and the delay in publication of the group’s 2017 consolidated financial statements. These announcements were followed by the immediate resignation of then group CEO, Markus Jooste, a dramatic fall in Steinhoff’s share price and a liquidity crisis across the group’s operating businesses.

Allen & Overy were instructed from the outset and advised the lead Steinhoff Europe AG creditors on a suite of stabilisation measures and restructurings proposals, including: (i) the potential provision of emergency liquidity funding; (ii) support arrangements that provided the comfort necessary for the directors of the key Austrian-incorporated finance companies to negotiate a restructuring deal and enter into a lock-up agreement with creditors; (iii) a UK scheme of arrangement (Stripes US Holdings Inc.) and two parallel interlocking company voluntary arrangements (Steinhoff Europe AG and Steinhoff Finance GmbH), which together implemented a comprehensive reorganisation of the European business and restructuring of its outstanding indebtedness, and (iv) the challenge to the Steinhoff Europe AG CVA, which was ultimately resolved on a consensual basis.

Partner Earl Griffith, who led on the matter, commented: "We’re very pleased to have been able to play our part in bringing the Steinhoff Europe restructuring to a successful close. This was a complex transaction, negotiated against the backdrop of serious accounting irregularities which had political and regulatory repercussions that are still playing out in the public eye. It required a pragmatic and commercial approach to reach a solution that allows the new management time to maximise value for creditors and to seek to address the litigation claims facing the group. The deal was also a testament to the strength of the A&O cross-border network and to the depth of experience in our market-leading restructuring team."

As well as Earl Griffith, the core Allen & Overy team comprised partners Andrew Trahair (now global head of Advanced Delivery) and Nick Lister, Nick Charlwood (senior associate), Philip Wells (associate) and Lara Panahy (associate). Lucid Agency Services Limited, who held multiple agent and security agent roles across the group’s European financings, were separately advised by an Allen & Overy team led by Randal Weeks (partner) and Jasmine Norris (associate). Tax advice was provided by Lydia Challen (partner). The team were assisted by partners and associates across the Allen & Overy network, as well as various external local counsel firms.

The wider Allen & Overy deal team spanned multiple offices including Hong Kong, Johannesburg, New York, Sydney, Germany, Luxembourg and the Netherlands each providing local law advice, and were further supported by the Project Management Office (based in London). 

 

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Key people

Andrew Trahair
Andrew Trahair
Partner and Head of Advanced Delivery
United Kingdom
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Earl Griffith
Earl Griffith
Partner
United Kingdom
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Lydia Challen
Lydia Challen
Partner
United Kingdom
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Nick Lister
Nick Lister
Partner
United Kingdom
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Randal Weeks
Randal Weeks
Partner
United Kingdom
Telephone icon+44 20 3088 2661
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Nick Charlwood
Nick Charlwood
Senior Associate
United Kingdom
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Jasmine Norris
Jasmine Norris
Associate
United Kingdom
Telephone icon+44 203 088 3225
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Lara Panahy
Lara Panahy
Associate
United Kingdom
Telephone icon+44 20 3088 5043
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Philip Wells
Philip Wells
Associate
United Kingdom
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