Steinhoff Global Settlement

• As part of the implementation of the Steinhoff Group global settlement, the board of SIHNV has resolved to commence a Dutch “suspension of payments” procedure (“Dutch SoP”) and, in parallel, the board of SIHPL has resolved to commence a statutory compromise process under South African law (“S155 Scheme”). The Dutch SoP relates only to SIHNV and the S155 Scheme relates only to SIHPL. These processes do not directly affect any of the other entities in the Steinhoff Group nor any of its operating businesses.
• SIHNV’s proposed composition plan as submitted in the Dutch SoP (“Dutch SoP Scheme Proposal”) and SIHPL’s proposed plan under the S155 Scheme (“S155 Scheme Proposal”) (together the “Schemes”) are inter-conditional in that each needs to succeed for the global settlement to be implemented. Their respective terms are available at www.steinhoffsettlement.com/case-documents.aspx.
• Implementation of the Steinhoff global settlement requires the requisite support of claimants and creditors. The implementation process is expected to take several months to approve and complete.
• Steinhoff has appointed Computershare as claims administrator (the “Claims Administrator”) to assist with the administration of claims for the purpose of the Dutch SoP/S155 Scheme creditors’ meetings and, following approval of the Schemes, to assist Steinhoff Recovery Foundation (“SRF”) with the further administration of claims and the settlement and payment process.
• Shareholders who held Steinhoff Shares  at 5 December 2017 and any other claimants are advised to seek independent legal and financial advice in respect of the Steinhoff settlement proposal and the Schemes.

• If you are an eligible claimant (as initially determined by the Claims Administrator), you will be given an opportunity to vote in the Dutch SoP (unless the District Court of Amsterdam appoints a committee of representatives) and/or the S155 Scheme creditors’ meetings (as applicable).
• Eligible claimants who want to use their voting rights in the Dutch SoP and the S155 Scheme must file their claims against SIHNV and SIHPL before the respective voting deadlines (announced at www.steinhoffsettlement.com/important-dates-deadlines.aspx). If you do not wish to participate in the respective voting meetings, but do wish to receive compensation, you should in any event file your claim before the Bar Date. You can file your claims here: link.
• The manner in which individual claimants vote at the voting hearings (in favour, against or abstain) does not have an impact on the eligibility to receive a payment in the context of the Dutch SoP or S155 Scheme. However, eligible claimants will only receive a payment if the implementation process is completed successfully, which means that the Dutch SoP and S155 Scheme should be approved by the creditors and confirmed by the relevant courts.
• Separately, eligible claimants may also receive a payment from the funds made available by Deloitte and the D&O Insurers. To receive such payment, eligible claimants must agree to the terms of the offers from Deloitte and the D&O Insurers by selecting the appropriate option on the claim form. For more information: www.steinhoffsettlement.com/settlements-deloitte-and-do.aspx. Eligible claimants will only receive payment from the funds made available by Deloitte and the D&O Insurers if the Dutch SoP and S155 Scheme are approved by the creditors and confirmed by the relevant courts.
• Hence, it is important that eligible claimants that support the proposed global settlement timely submit their claims in order to use their voting rights to vote in favour of the settlement.
  

SIHNV Dutch SoP Claims

• SIHNV claimants may access a copy of the Dutch SoP Scheme Proposal at www.steinhoffsettlement.com/case-documents.aspx.
• Unless the District Court of Amsterdam appoints a committee of representatives, a creditor in the Dutch SoP Scheme who wishes to attend and vote at the SoP voting hearing  will need to provide the SoP administrator (c/o the Claims Administrator) on or before 15 June 2021 with the necessary supporting documentation evidencing their status as a Dutch SoP Scheme claimant and provide evidence of the value of their claim.
• The SoP administrators are considering a request to the District Court of Amsterdam for the appointment of a committee of representatives. If appointed, the committee of representatives, instead of individual Dutch SoP Scheme creditors, will vote on the Dutch SoP Scheme Proposal.
• SIHNV claimants will be able to submit their claims, in due course, by completing the relevant claim form on www.steinhoffsettlement.com (further details in this regard are contained in the Dutch SoP Scheme Proposal).
• The SoP voting hearing will be held on 30 June 2021 at 10.00 am (CET) at the District Court of Amsterdam, located at Parnassusweg 280 in Amsterdam, The Netherlands. Details about how to attend the SoP voting hearing will be published in due course on www.steinhoffsettlement.com.

SIHPL S155 Scheme Claims

• SIHPL claimants may access a copy of the S155 Scheme Proposal in the manner set out in the notice of availability of the S155 Scheme Proposal (available on www.steinhoffsettlement.com/case-documents.aspx).
• A SIHPL claimant who wishes to attend and vote at the S155 Scheme meeting will need to provide the Claims Administrator with the necessary supporting documentation, prior to the voting deadline, evidencing their status as an eligible S155 Scheme claimant and provide evidence of the value of their claim.
• SIHPL claimants will be able to submit their claims, in due course, by completing the relevant claim form on www.steinhoffsettlement.com (further details in this regard are contained in the S155 Scheme Proposal).

• The full duration of the settlement implementation process, once launched, is estimated to be between 6 and 12 months. SIHNV and SIHPL intend to implement the proposed settlement with the objective of distributing the settlement consideration in respect of the undisputed claims during Q3 of the 2021 calendar year. If it is determined that any amounts should be paid pursuant to disputed claims, these subsequent settlement distributions will be made as soon as reasonably practicable.
• SIHNV and SIHPL will provide updates on the progress generally, including key dates and steps required for both the Dutch SoP Scheme Proposal and the S155 Scheme Proposal, via the settlement website (www.steinhoffsettlement.com). Claimants are encouraged to regularly refer to this website for updates and key information.

• The level of claimant support required for the approval of the Dutch SoP Scheme Proposal is a simple majority of attending ordinary insolvency creditors representing at least 50% of the total value of claims against SIHNV. The level of claimant support required for the approval of the S155 Scheme Proposal is a majority in number, representing at least 75% by value, of creditors present and voting in each class of creditors of SIHPL.
• If a committee of representatives is appointed in the Dutch SoP, the committee of representatives, instead of individual Dutch SoP Scheme creditors, will vote on the Dutch SoP Scheme Proposal. In that event, the Dutch SoP Scheme Proposal is adopted if it is approved by a qualified majority of at least 75% of attending members of the committee of representatives.

• If SIHNV and SIHPL are unsuccessful in securing a settlement of the outstanding litigation then the various litigation processes will simply continue. 
• In the event that the proposed global settlement does not receive sufficient support required to launch an implementation, Steinhoff will revisit available alternative options open to it at that time.
• Steinhoff urges all claimants to take this opportunity to conclude a settlement on the proposed terms by supporting the proposed Schemes, which will allow Steinhoff to continue operations and preserve value for all stakeholders, including the employees of the Steinhoff Group’s underlying businesses.

• If SIHNV and SIHPL are unsuccessful in securing a settlement of the outstanding litigation then further progress of Steinhoff’s restructuring could be in doubt.
• At that point, Steinhoff would consider all options open to it, having regard to the interests of all stakeholders and the respective fiduciary duties of the Supervisory Board and Management Board of SIHNV, the board of SIHPL and the boards of SIHNV’s subsidiaries.
• Steinhoff’s firm position remains that liquidation would be a bad outcome for all stakeholders and would materially impair the value of assets available for distribution and likely diminish the amount of the claimants’ recoveries relative to the settlement. This is why Steinhoff is urging all claimants to take this opportunity to agree a settlement by supporting the proposed Schemes.

• Reference to “all stakeholders” means:
  • current ordinary and preference shareholders;
  • financial creditors;
  • employees of Steinhoff’s underlying businesses;
  • customers;
  • suppliers and landlords;
  • various government related entities, including regulators; and
  • the claimants.

• There are two groups of (litigation) claimants that fall under the Steinhoff Group Settlement: contractual claimants and “Market Purchase Claimants” ("MPCs").
• Contractual claimants are claimants who hold claims against Steinhoff which:
  • relate to the alleged accounting irregularities; and
  • arise as a result of a contractual arrangement entered into with SIHPL between 1 March 2009 and 7 December 2015 or SIHNV between 7 December 2015 and 5 December 2017 , whereby SIHPL or SIHNV shares were purchased or SIHPL or SIHNV shares were issued or exchanged as consideration for the contribution of that contractual claimant's business or assets.
• MPCs are claimants who have an “MPC Relevant Claim”. An MPC Relevant Claim is a claim against SIHPL and/or SIHNV relating to alleged accounting irregularities and arising as a result of purchasing or acquiring Steinhoff Shares. In summary, a Market Purchase Claimant is someone who:
  • acquired SIHPL shares listed on the Johannesburg Stock Exchange (“JSE”) between open of business on 2 March 2009 and close of business on 6 December 2015; and/or
  • acquired SIHNV shares listed on the JSE or the Frankfurt Stock Exchange (“FSE”) between close of business on 6 December 2015 and close of business on 5 December 2017; and/or
  • were not the original purchaser of the relevant shares, but had these transferred to them, for example because of a gift or inheritance; and in each case, continued to hold at least some of those shares (or, in the case of SIHPL shares, SIHNV shares received in exchange for them) at close of business on 5 December 2017.

• Steinhoff believes the terms of the proposed settlement are fair and realistic in the circumstances and urges claimants to take this opportunity to agree a settlement.
• Vereniging van Effectenbezitters (“VEB”) has issued a support statement and withdrawn its collective (class) action in the Netherlands and recommended the proposal.
• Steinhoff has also received letters of support for the proposed settlement from various representatives of MPCs as well as contractual claimants. Reference is made to, among others, the press release dated 31 March (www.steinhoffsettlement.com/updates-and-press-releases.aspx).
• Steinhoff will provide a subsequent update in relation to support levels, as and when appropriate.

• In order for the proposed global settlement to proceed, approval is required from sufficient claimants to approve the Schemes.
• A consent request of was launched on 9 October 2020 to obtain the formal support of the financial creditors for the terms and proposed implementation of the settlement (the “October Consent Request”).
  • During November 2020 the Company announced that it had received overwhelming support from the financial creditors and that, in particular, that the Steinhoff Group had obtained the requisite consent from its creditors in respect of all relevant financial instruments, with the exception of the Company’s “SEAG Contingent Payment Undertaking”.
  • As a result, SIHNV then undertook an English law scheme of arrangement to obtain the necessary unanimous approval under the SEAG Contingent Payment Undertaking. The necessary majorities of lenders approved the proposal in the scheme meetings that took place on 15 December 2020 in London and the High Court of England sanctioned the terms of the SIHNV scheme in a judgment released on 5 February 2021. The conditions to the scheme were satisfied on 5 February 2021.
  • In due course, incremental consents will be sought from SIHNV’s financial creditors in connection with further long form documents and other matters relating to the implementation of the Steinhoff settlement in accordance with the terms of the October Consent Request.
• SIHNV applied to Finsurv for consent to the cross-border payments to be made as part of the proposed settlement and received such approval on 25 November 2020. The approval is valid for 12 months. Further approvals will be sought if and to the extent required in respect of the terms to be submitted under the Schemes.

• A liquidation would not add value. Rather, a liquidation of SIHNV and/or SIHPL, and resulting accelerated sales or liquidation processes in respect of their direct and indirect interests in companies in the Steinhoff Group and substantial costs of liquidation would, in SIHNV’s and SIHPL’s view, materially impair the value of assets available for distribution to their respective stakeholders (including litigants) and would adversely affect the timing and diminish the amount of the claimants’ recoveries in comparison to the proposed settlement.
• Such processes could also be expected to adversely affect the interests of the Steinhoff Group’s broader stakeholders, including customers and employees.

• No. If the proposed settlement is successful it will lead to the full and final release of all claims (other than those referred to below) against companies in the Steinhoff Group arising as a result of the alleged accounting irregularities. Due to the nature of the court proceedings being used to give effect to the proposed settlement, this will include the claims of those claimants who did not participate in the proposed settlement.
• However, not all claims against SIHNV or SIHPL will be compromised under the Schemes. Certain disputed claims against SIHNV will continue to be defended on the basis that any finally adjudicated claim or agreed settlement amount will be subject to the same SIHNV recovery rate payable to MPC and contractual claimants of SIHNV. Similarly, one disputed contractual claim against SIHPL will continue to be defended on the basis that any finally adjudicated claim or agreed settlement amount will be subject to the same recovery rate payable to contractual claimants of SIHPL. Certain other claims against SIHPL that do not qualify as either MPCs or contractual claims will not be subject to the S155 Scheme Proposal at all. SIHPL will continue to dispute such claims, which will be payable in full to the extent that they are ultimately upheld by way of final adjudication or agreed settlement.

The boards of SIHNV and SIHPL believe that the proposed global settlement and the proposed implementation processes, through the Schemes, are in the best interests of SIHNV and SIHPL, respectively. In particular, the proposed settlement will:

• provide participating claimants with certainty of outcome and recovery relative to the cost and uncertainty associated with protracted, expensive and unpredictable court processes in pursuing their claims;
• provide consistent treatment of recovery to similar claimants to the extent possible;
• offer a more favourable and more certain recovery on their claims as compared to a liquidation of SIHNV or SIHPL;
• resolve a very substantial proportion of the material contingent liabilities faced by the Company and SIHPL as a result of the ongoing litigation;
• include a debt repayment term extension from the Steinhoff Group’s financial creditors under the SIHNV and SIHPL CPUs which will be matched by the intra-group creditors;
• not affect the rights of current trade creditors;
• assist the continuing efforts to support the operating businesses in the Steinhoff Group to preserve and realise business value for the Steinhoff Group’s stakeholders and employees;
• reduce the current burden on the Steinhoff Group of the very material costs spent litigating numerous legal proceedings across multiple jurisdictions; and
• reduce the proportion of Steinhoff Group management time committed to the supervision and conduct of the various legal proceedings, allowing management to concentrate on the continued improvement of the underlying businesses and development of plans to realise value and de-leverage the Steinhoff Group’s balance sheet.

SIHNV and SIHPL have reached an agreement with the Deloitte Firms pursuant to which the Deloitte Firms will, subject to the fulfilment of certain conditions, support the proposed Steinhoff global settlement proposal.

This means that provided that Steinhoff successfully completes the contemplated Dutch SoP and the S155 Scheme and certain other conditions are fulfilled, the Deloitte Firms will, in exchange for certain waivers and releases make additional compensation available to certain Steinhoff claimants, including the MPC Claimants:

1. an amount of up to EUR 55.34 million for distribution to the MPC Claimants (the “Deloitte Settlement Fund”); and
2. an amount of EUR 15 million for distribution to certain contractual claimants.

MPC Claimants or their representatives who in due course wish to apply to receive a part of the Deloitte Settlement Fund must use the same Claim Form as the Claim Form to be used for submitting their claims in the Dutch SoP and the S155 Scheme. The Claim Forms and further relevant information are available on www.steinhoffsettlement.com.

Eligible contractual claimants will receive individual notice from Steinhoff on the manner in which they can apply to receive a share of the amount offered to them

It is important to note that the Deloitte Firms do not in any way admit liability for the losses incurred by Steinhoff and its stakeholders as a result of the accounting irregularities at Steinhoff.

SIHNV and SIHPL have reached an agreement with certain insurance companies underwriting Steinhoff’s (primary and excess) Directors and Officers insurance policy (the “D&O Insurers”) and certain directors and officers who work or have worked for or been associated with a Steinhoff Group company (the “Settling D&Os”), pursuant to which D&O Insurers and Settling D&Os will, subject to the fulfilment of certain conditions, support the proposed Steinhoff global settlement proposal.

This means that provided that Steinhoff successfully completes the contemplated Dutch SoP and the S155 Scheme and certain other conditions are fulfilled, D&O Insurers (on behalf of the Settling D&Os) will, in exchange for certain waivers and releases including for all former directors and officers and other employees who work, or have in any way worked, for or been associated with a current or former Steinhoff group company, make additional compensation available to certain Steinhoff claimants, including the MPC Claimants:

1. an amount of up to EUR 55.5 million for distribution to the MPC Claimants (the “D&O Insurers Settlement Fund”); and
2. an amount of EUR 15 million for distribution to certain contractual claimants.

MPC Claimants or their representatives who in due course wish to apply to receive a part of the D&O Insurers Settlement Fund must use the same Claim Form as the Claim Form to be used for submitting their claims in the Dutch SoP and the S155 Scheme. The Claim Forms and further relevant information are available on www.steinhoffsettlement.com.

Eligible contractual claimants will receive individual notice from Steinhoff on the manner in which they can apply to receive a share of the amount offered to them.

It is important to note that D&O Insurers and the Settling D&Os do not in any way admit liability for the losses incurred by Steinhoff and its stakeholders as a result of the accounting irregularities at Steinhoff.