S.Africa's Steinhoff ups offer to settle shareholder claims by $287 million

JOHANNESBURG (Reuters) -Scandal-hit South African retailer Steinhoff International said on Friday it was increasing its proposed offer to settle multiple shareholder claims by 243 million euros ($287 million) to 1.2 billion euros ($1.4 billion).

The announcement sent its Johannesburg-listed shares up 12.66%, while its primary Frankfurt-listed shares jumped by 15.33%.

The retailer faces 90 separate legal claims in the Netherlands, Germany and South Africa from shareholders who lost money when it revealed holes in its accounts in December 2017, the first sign of a multi-billion dollar fraud.

The basis of its existing settlement offer, already agreed with financial creditors as part of a 2019 restructuring, has, however, been undermined by the Western Cape High Court in Stellenbosch, which found on July 2 that Steinhoff had restructured its debt improperly in 2019.

Steinhoff, the majority-owner of Pepkor in Africa and Pepco in Europe, said on Friday it intended to appeal that ruling.

The combined claims of those who have quantified their alleged damages are in excess of 136 billion rand ($9.44 billion), Steinhoff has previously said.

In a statement on Friday, it said there had been "a material improvement in the underlying financial and operational performance of the Group since the announcement of the settlement proposal in July 2020", when the effects of both COVID-19 and currency movements had restricted the funds available for a settlement.

As a result, the total settlement offer to contractual claimants against Steinhoff International Holdings N.V. (SIHNV) and market purchase claimants against SIHNV and Steinhoff International Holdings Proprietary Limited (SIHPL) has been increased to 613 million euros from 370 million euros, the firm said.

The total amount on offer to market purchase claimants is now estimated to be about 442 million euros, up from 266 million euros, Steinhoff added.

"The revised proposal offers claimants a fair outcome, and the best opportunity to recover amounts in respect of any claims in the near term and with certainty," Group CEO Louis du Preez said.

If Steinhoff's appeal is unsuccessful, however, the group said further claims might arise, and that there was likely to be "a long and complicated series of multi-jurisdictional legal disputes". ($1 = 0.8475 euros)

($1 = 14.4063 rand)

($1 = 0.8467 euros)

(Reporting by Nqobile Dludla;Editing by Promit Mukherjee and Kevin Liffey)

By Nqobile Dludla