January 24, 2018 / 5:49 PM / 10 months ago

LPC-Block of Steinhoff loans successfully auctioned as lenders sell out

LONDON, Jan 24 (Reuters) - A €27.5m block of Schuldschein loans in troubled South African retail group Steinhoff has sold in Europe’s secondary loan market at good levels, banking sources said.

The block of loans came from an Austrian bank and cleared the market at around 70%-71% of face value, the sources said.

The level is an improvement on last week when several smaller €2m-€5m blocks of Schuldschein sold at around 64% of face value, the sources said.

“People thought the latest block would be bid higher due to more positive sentiment around the business but no-one dreamt that it would sell at that level. It might prompt more sellers to come out,” a trader said.

Bids were also due in an auction process by 5pm on January 24 on a €25m block of Steinhoff’s revolving credit facility (RCF), sources said.

The seller was a bank selling its entire RCF exposure, one of the sources added.

Creditor groups of Steinhoff are joining forces to position themselves for a potential debt restructuring before the company meets creditors on Friday.

Roughly €2bn of Steinhoff’s €10.7bn in debts mature this year.

Steinhoff, owner of more than 40 retail brands including Poundland in Britain, is trying to plug a liquidity gap after admitting “accounting irregularities” last month, which triggered an 85% share price slide for the group.

Editing by Alasdair Reilly

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