Dear Mr. du Preez,
Dear Mr. de Klerk,
SdK Schutzgemeinschaft der Kapitalanleger e.V. is an investor protection
organization with approximately 8,200 members. We represent the specific interests
of approximately 190,000 investors which transfer their voting rights to SdK at
approximately 450 annual general meetings each year.
In recent weeks, we have been contacted by numerous members and investors who
are shareholders of Steinhoff International Holdings N.V.. We intend to represent
them at the upcoming Annual General Meeting of the Company. Thus, we have
intensively dealt with the published restructuring proposal of the company dated
December 15, 2022. In our view, this proposal raises numerous questions and we
have strong doubts whether the interests of the shareholders have been adequately
taken into account.
Since 2017, the company has consistently communicated its intention to reduce its
debt in the long run by selling valuable investments, and consequently reducing the
interest payments and achieving a financially sustainable level of debt. By the end
of the 2020/21 financial year, this approach also appeared to be succesfull, with an
positive equity of EUR 121 million in the separate financial statements for the first
time since the accounting scandal became public. In mid-2022, the company
continued to communicate its intention to stick to this path trying to extend the
maturity date of its financial debt beyond June 30, 2023.
Against this background, the restructuring proposal of December 15, 2022 came as
a great surprise in our view. From our point of view, this does not represent a
proposal acceptable for the owners. The main critical points are as follows:
1) An extension of the maturity date of the debt gives the company more time
to repay these liabilities. However, since the interest rate will remain nearly
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unchanged, the restructuring proposal will not lead to any balance sheet
restructuring. Thus, a future increase in the value of the company's existing
assets is required that is higher than the average return on equity of
comparable companies.
2) It is not clear to us, why the value of the shareholders' equity should currently
be zero. If all the company's shareholdings are valued at a for sale level, it
does not seem unlikely to us that the three major shareholdings in the Pepco
Group, Pepkor and Mattress Firm alone already exceed the accrued financial
debt. In our view, however, this would require the sale of all shares of at least
one of the three major companies as part of a long-term strategy in order to
reduce financial debt to a sustainable level. In this context, it is regrettable
that the IPO plans of Mattress Firm have been canceld.
3) The future structure of ownership rights envisaged in the reorganization plan
is not acceptable under any circumstances. The current shareholders,
irrespective of the percentage they will hold in a future company, require
tradable shares. Furthermore, all shares must also carry voting rights.
We therefore ask you to publish further details of the restructuring plan as soon as
possible so that we can examine them before the Annual General Meeting. We
already have numerous questions, which we have attached. We will also make this
letter and the questions public, and ask you to answer the questions publicly in
advance of the Annual General Meeting. In our view, this is necessary so that
shareholders can consider the appropriateness of the restructuring plan in advance.
A decision on the approval of such a significant reorganization plan in such a
complex matter cannot be made in a few days or even within an Annual General
Meeting. This requires a sufficient period of time to consider the proposals.
Please do not hesitate to contact me if you have any questions.
https://sdk.org/assets/Klageverfahren/...dK-to-Steinhoff-Board-en.pdf
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