The Tekkie Town settlement with the Steinhoff Group involves the claimants being paid R500 million and receiving 29.5 million Pepkor Holdings shares. Pepkor has some 3.7 million shares in issue. File photo
The founder of Tekkie Town Braam van Huyssteen and the former owners and management, said on Friday that the dropping of litigation against Steinhoff International would enable them to significantly ramp up the footwear retail business.
Steinhoff’s share price rose 9.8 percent to R3.46 on the JSE on Friday morning following its announcement that it had reached agreement with two major detractors of Steinhoff’s R25 billion litigation settlement proposal, the former owners of Tekkie Town and Trevo Capital, following the collapse of the international retail group due to accounting fraud in 2017.
The Tekkie Town settlement with the Steinhoff Group involves the claimants being paid R500 million and receiving 29.5 million Pepkor Holdings shares. Pepkor has some 3.7 million shares in issue.
Former Tekkie Town chief executive Bernard Mostert said there were a number of reasons behind the agreement with Steinhoff and its subsidiaries, including Pepkor.
The main reason was that they were enjoying great momentum in their new business.
“An increased focus coupled with the proceeds of the settlement, and without the distraction of litigation, will enable us to amplify that momentum,” he said.
He said that in little less than three years, they had grown from zero stores to more than 160 stores and 800 wholesale accounts.
“With the litigation handbrake dropped, we can ramp up this business tremendously and significantly add to the almost 1000 jobs we have created since August 2018,” said Mostert.
He said participation in the settlement would also allow South African class action participants to share in the settlement proceeds.
“This will address, to some degree, the losses they suffered at the hands of the Steinhoff scandal,” said Mostert.
“We hope that this landmark and historical litigation will pave the way for legislation that will not hobble the man on the street to participate in recovery processes of this nature. To that end we respect Steinhoff’s final position to accommodate this class of claimant in the Steinhoff Global settlement.”
Regarding their litigation and many requests to have control of the Tekkie Town business restored to them, Mostert said: “We were very happy to run this process to the very end, as it was the most logical and rational remedy available to us.
“However, we have come to expect the unexpected. One such conclusion is that successful litigation and the return of control of the business would probably negatively impact the momentum that we enjoy in our current business. Our focus is now on moving forward and we take pride in the fact that we have built a successful business and are eager to do so for the second time.”
Mostert said that wherever Pepkor may take Tekkie Town in future, “we are proud that we delivered it in good shape. Our journey in building it and fighting for it has shown how much we care for Tekkie Town and we wish them well taking it forward without us.”
BUSINESS REPORT