Steinhoff’s former chief Jooste set to cash in after making deal with lenders

Bloomberg

Steinhoff International Holdings NV’s former Chief Executive Officer Markus Jooste has been thrown a lifeline by banks as the global retailer he oversaw for 18 years struggles to survive an accounting scandal that happened under his watch.
The 57-year-old’s personal investment company Mayfair Holdings Pty Ltd. has been given until the end of the year by lenders to sell as much as $167 million in assets ranging from real estate to racehorses to repay almost 1.6 billion rand of defaulted loans, according to an agreement between Mayfair and its creditors seen by Bloomberg.
Creditors include two companies tied to Jooste and his son-in-law, Stefan Potgieter, which may realise more than 200 million rand from the disposals, the documents show.
Mayfair will also be able to keep any proceeds left over after creditors are repaid, which could amount to about 500 million rand.
After Steinhoff shares crashed when the company reported a hole in its accounts in December, Mayfair defaulted on the loans and wasn’t able to immediately repay them. That gave banks including Sanlam Ltd.’s capital markets arm, Investec Plc and Absa, a banking unit of Barclays Africa Group Ltd., an option to liquidate the company or come up with a breakup proposal to release capital. The lenders agreed that the latter would realise more value. Mayfair owes the three banks a combined 959 million rand.
Steinhoff has distanced itself from the former CEO, who quit in December, and have referred him to an anti-corruption police unit. The owner of Conforama in France and Mattress Firm in the US has also started a probe into its finances that has so far uncovered the inflation of income and asset values over several years. The investigation is ongoing.
A so-called scheme of compromise “allowed a standstill until December 2018 to allow the Mayfair entities to sell assets in an orderly manner to benefit all creditors,” Absa said, adding that all creditors backed the plan. A person who answered the phone at Mayfair’s Cape Town office said the company won’t comment. Jooste didn’t respond to a mobile-phone message seeking comment.
As well as the 200 million rand owed to companies linked to the ex-CEO and Potgieter, a further 420 million rand is owed to a company owned by Malcolm King, a property tycoon and one of Jooste’s friends, the scheme of arrangement shows. Potgieter is the sole director of Mayfair after Jooste quit in December. Neither Potgieter nor King responded to emailed requests for comment.