April 15, 2019 / 10:13 AM / 3 months ago

South Africa's Steinhoff set to give Conforama financiers enhanced rights

A logo is seen on the facade of a discount furniture retailer Conforama store in Paris, France, April 22, 2016. REUTERS/Charles Platiau

(Reuters) - South African retailer Steinhoff on Monday announced key terms for its French unit Conforama’s plan to raise 316 million euros ($357.4 million) to shore up its finances after sales fell and costs rose.

Steinhoff said the financing included the issue of warrants in an amount equal to 49.9 percent of Conforama’s shares to the providers of cash, giving the financiers enhanced governance rights and allowing them to appoint two independent directors to Conforama’s board.

The financing also includes call protections - a security measure which imposes penalties if a loan is repaid earlier than its maturity date.

Steinhoff in December 2017 admitted accounting irregularities, erasing about 85 percent of its market value and throwing it into a liquidity crisis.

The company had said in a presentation to lenders posted on its website last week that Conforama would get the money on Monday.

Steinhoff Deputy Chief Executive Alexandre Nodale had stepped down last week, but promised to stay on as the CEO of Conforama until the company finalises its long-term financing

($1 = 0.8841 euros)

Reporting by Noor Zainab Hussain in Bengaluru; Editing by Gopakumar Warrier

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