June 8, 2018 / 1:47 PM / 6 months ago

Steinhoff's Kika/Leiner still on lookout for new credit insurer

VIENNA, June 8 (Reuters) - Retailer Steinhoff’s Austrian unit Kika/Leiner has not managed to find a new credit insurer by Friday as planned, despite creditor support for its South African parent, and is now hoping for a solution next week, it said.

Credit insurers decided last week to withdraw cover for Kika/Leiner, increasing the nervousness of its suppliers and investors and fuelling speculation about a possible sale.

Steinhoff International,, which has been embroiled in an accounting scandal and owes creditors around 9 billion euros ($11 billion), said on Wednesday it had received creditor support letters for two companies it used to finance its overseas divisions including Kika/Leiner.

“We are currently conducting intensive negotiations to conclude (new credit insurance) contracts,” Kika/Leiner managing director Gunnar George said in a statement.

On Monday, he said a solution should be found by Friday. Now he hopes for one next week.

Kika/Leiner, with about 70 stores in Austria and central and eastern European countries, needs further funding besides a turnaround plan focusing on reducing product range and headcount, Steinhoff said in a presentation to investors on May 18.

The unit’s marketability and fair value were not currently possible to assess, the presentation said.

In an unusual step, Austria’s competition authority on Tuesday brought up the idea of a Kika/Leiner takeover by market leader XXXLutz. Such a move could help to secure around 5,000 Austrian jobs.

The two companies currently control around 53 percent of the Austrian furniture and household goods retail market, according to data provided by Kika/Leiner.

Privately held XXXLutz has signalled it is prepared to buy its closest Austrian rival, but has not made an offer yet.

“For now, we wait and see what happens next,” a XXXLutz spokesman said on Friday.

$1 = 0.8516 euros Reporting by Kirsti Knolle; Editing by Mark Potter

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