June 14, 2018 / 7:34 PM / in 10 days

UPDATE 2-Investor Benko strikes deal to buy Steinhoff's Austrian unit

* Austrian investor pays around 500 mln euros -local media

* Kika/Leiner did not manage to find new credit insurer

* Contract details to be fixed within the next days (Adds confirmation from Steinhoff, detail, background)

By Kirsti Knolle

VIENNA, June 14 (Reuters) - Austrian property and retail investor Rene Benko has reached a deal to buy Steinhoff’s Kika/Leiner furniture and household goods retail unit, saving it from bankruptcy, Kika/Leiner said on Thursday.

Steinhoff revealed holes in its accounts six months ago, shocking investors who had backed its reinvention, sending its shares crashing and leaving it scrambling to pay its debts.

“With great pleasure we can announce that the offer laid out by the Signa Group has been accepted by the Steinhoff Group,” Kika/Leiner’s managing director Gunnar George said in a statement.

All contractual details would be fixed within the next few days, he said, without providing a purchase price.

Daily Oesterreich said Signa would pay roughly 500 million euros ($580 million) and the company would receive an injection of 100 million euros.

Kika/Leiner, which lost credit insurance cover two weeks ago, makes annual revenue of roughly 800 million euros in Austria with around 5,400 employees in 50 stores, George said in January.

It generates around 200 million euros with 1,600 staff in its other, mainly eastern European markets, George said at the time. It was not clear whether Signa agreed to also buy that business.

Targeting upmarket as well as price-conscious customers with a broad product range, Kika/Leiner has a market share of around 20 percent in its home market. In comparison with rivals such as Ikea, the group has catching up to do in online sales, experts say.

It needs further funding besides a turnaround plan focusing on reducing product range and headcount, Steinhoff said in a presentation last month. The unit’s marketability and fair value were not currently possible to assess, it said.

Benko controls a 12 billion euro real estate portfolio and generates annual revenue of 4 billion euros with retail businesses via his Signa Holding, according to his website.

Benko already bought Kika/Leiner’s flagship store in central Vienna shortly after the Steinhoff crisis erupted in December.

Benko’s Signa runs more than 125 retail stores, including German department store Karstadt, and several online sports goods retailers, which it plans to list in autumn, according to sources. It has not been engaged in furniture retail so far.

Canadian department store operator Hudson Bay said in February it rejected a 3 billion euro bid from Benko for its German Kaufhof unit.

On Tuesday, Steinhoff creditors agreed to give it more time to restructure 9 billion euros ($11 billion) in debt. Holders of 2.7 billion euros in three convertible bonds backed a debt standstill agreement, the company said.

A spokesman for Benko was not immediately available for comment. ($1 = 0.8627 euro) (Additional reporting by Francois Murphy; editing by Alexandra Hudson and Leslie Adler)

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