SHFSJ PIK-TERM A1 1L EUR Corp

Steinhoff International Holdings NV

Credit, Consumer


Publicly traded companies mentioned herein: Pepco Group NV (PCO PW), Pepkor Holdings Ltd (PPH SJ), Steinhoff International Holdings NV (SNH SJ)

Highlights

The presenter is long the A1 first lien term loans of Steinhoff International Holdings NV (SNH SJ), which is a €2.3B tranche within the Steinhoff structure. Steinhoff was a global retail conglomerate until an accounting fraud scandal caused the entire structure to blow up. It then went through a reorganization and is now likely headed towards the liquidation of its various assets, although the time horizon is unclear. He is bullish on the underlying assets and therefore the SFH A1s, which will be the first security to receive distribution following liquidation. At a dollar-denominated price of ~45, he notes the security is undervalued compared to the already-cheap market prices of these publicly traded, high quality assets. Underwriting a 75% recovery, he expects 67% gross returns and a ~50% IRR as management executes on the liquidation.

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Idea Discussion

Commentor 1 - 2 weeks ago

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