Banks and creditors from the US and the U.K are creditors that are both involved in the exposure of billions to Steinhoff whose market value has collapsed after the news of accounting irregularities leading up to one of the biggest scandals within the business industry.
After the Steinhoff scandal, Banks also received exposure to the international furniture retailer through loans supported through investment vehicles by the company’s Chairman, Christo Wiese. In 2016, Wiese is the largest shareholder of Steinhoff that had pledged 628 million of the company’s shares in collateral in order to borrow funds from Goldman Sachs Group Inc, HSBC, Nomura Holdings Inc, and Citigroup. Wiese actions of getting a loan were to join in a share sale in regards to the acquisition of Poundland and Mattress Firm.
It is still not clarified if Wiese has already paid a portion of those loans. Steinhoff news showed that the market value of all the invested shares that were pledged as collateral is now down to €365 million which initially stood at €2.2 billion.
Johannesburg-based, FirstRand unit Rand Merchant Bank states that they have banking links with Steinhoff and entities that are owned by Wiese. They have also reviewed the credit exposures linked to the entities and has firm results that they are secured.
The firm also owns Conforama, the home-furnishings chain in France stated that they were considering to sell €1 billion worth of assets to boost their liquidity. They continued by saying that one of the company’s African subsidiaries would find ways to refinance long-term liabilities that will amount to another €1 billion, while an investigation to search for possibilities to recover €6 billion worth of assets. All these actions called by the firm may have the chance to recover some of the funds owed to investors and banks.