Kirkland & Ellis advised an ad hoc group of the major financial creditors of the Steinhoff retail conglomerate on its restructuring via the first major international Dutch law restructuring plan (or “WHOA”). The restructuring closed on June 30, 2023, following approval of the WHOA by the Amsterdam District Court on June 21. It is also the first time a large public company has used a WHOA and represents the largest capital structure by a factor of 10 to utilise a WHOA. Kirkland has been advising major financial creditors in connection with Steinhoff since December 2017.
This transaction provides a holistic solution to maturities across Steinhoff’s uniquely complex capital structure. Approximately €10.4 billion of the group’s debt facilities had been due to mature on June 30, 2023. The transaction’s purpose was to give the business the runway to facilitate the controlled disposal of the group’s assets in order to preserve and realise the highest possible value for its stakeholders. Specifically, the transaction involves:
1. The amendment of the group’s existing debt facilities and contingent payment undertakings, including extending existing maturities to at least June 30, 2026;
2. A reorganisation of the group, including transfer to a new holding structure (leaving the existing dual German- and South African-listed Dutch parent company as an empty listed company) via the WHOA;
3. The issuance of new contractual instruments — contingent value rights — that give entitlement to a distribution of any future remaining value in the group after repayment of all external debts; and
4. Introducing a regime that facilitates an efficient distribution of the Group’s assets (including listed securities) directly to financial creditors in satisfaction of their claims.
The restructuring plan received near-unanimous support among financial creditors. The Dutch court sanctioned the plan notwithstanding opposition from the dissenting shareholder class.
The Kirkland team was led by restructuring partners Sean Lacey and Thomas Jemmett and associate Arwyn Davies.