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Allen & Overy advises on Steinhoff’s landmark equity reorganisation and c.EUR10 billion debt maturity extension, implemented via a Dutch public WHOA

Today, Steinhoff successfully completed its equity reorganisation and c.EUR10 billion debt maturity extension. The restructuring is the latest in a series of restructuring efforts undertaking by the group following the announcement of accounting irregularities in December 2017.

This landmark restructuring is one of the largest to be implemented by a WHOA to date and the first time a large publically listed company has used a WHOA. It is also the fourth major WHOA A&O has advised on, having recently advised on the WHOA proceedings for, amongst others, the Vroon Group and Royal IHC.

Steinhoff’s latest restructuring has resulted in:

  1. The establishment of Dutch foundations and the indirect transfer of the majority of the economic interests in the post-closing equity of the group to the financial creditors, thereby disenfranchising the existing shareholders;
  2. An extension of the maturity date under the group services debt facilities, associated  continent payment undertakings and intercompany loans to at least 30 June 2026, with two twelve-month extension options available with requisite lender consent;
  3. A re-designation and re-tranching of a portion of its existing debt facilities;
  4. The introduction of a comprehensive “solvent distribution regime” to facilitate an efficient distribution of the Group’s assets at fair value directly to financial creditors, subject to any legal and regulatory restrictions, if debt has not been discharged in full at extended maturity; and 
  5. The introduction of limited recourse terms and “solvent liquidation” provisions for the benefit of the group.

The crossjurisdictional A&O team in England, the Netherlands, Germany, Luxembourg and various other jurisdictions has advised on Steinhoff since 2017, first as creditor co-counsel and subsequently advising Kroll Agency Services Limited and Kroll Trustee Services Limited in multiple standard and bespoke agency capacities across the structure. In that period the group has successfully deployed, and A&O has advised on, various restructuring tools in order to stabilise and improve the Steinhoff's groups financial position (including English schemes of arrangement and company voluntary arrangements, a US Chapter 11 bankruptcy, a Dutch suspension of payments process and South African scheme of arrangement).

The A&O team was led by partners Randal Weeks and Sigrid Jansen, senior associates Philip Wells, Lara Panahy, Dawid Sztandera, and associates Leo Hotham, Elena Aspinall, Mercedeh Naseri, Sascha Franke and Déborah Kirmann as well as trainee Ashley Chiang.

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