GEORGE NEWS - The former owners of Tekkie Town (the Tekkie Town vendors) reached a settlement with Steinhoff Group yesterday, Wednesday 15 December.

This ends a litigation battle of five years between the two parties in which the Tekkie Town vendors fought to get their business back. The R3,2-billion worth of shares they had received for selling the business to Steinhoff in 2016 became worthless when the retail giant collapsed in 2017.

In terms of the settlement agreement, Steinhoff Africa Holdings will pay R500-million in total to the former Tekkie Town owners, and will deliver 29,5 million shares in Pepkor Holdings, subject to a lock-up of 180 calendar days following transfer (when the shares may not be sold).

This follows after the Tekkie Town vendors brought a liquidation application against Steinhoff in May this year. Should this application have succeeded, Steinhoff's proposed R25-billion settlement plan with all its other claimants would have sunk.

In a statement by the Tekkie Town vendors, the former CEO of Tekkie Town, Bernard Mostert, said one of the reasons for settling is that they are enjoying great momentum in their new business, Mr Tekkie. 

"Without the distraction of litigation and with the proceeds from the settlement, we will be able to amplify the momentum. In little less than three years, we have 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 1 000 jobs we have created since August 2018."

He said the settlement will furthermore 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.

"We hope that this landmark and historical litigation will pave the way for legislation that will not hobble the man on the street to successfully 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," Mostert said.

Commenting on their relentless quest to have control of the Tekkie Town business returned 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.

"Wherever Tekkie Town may go and wherever Pepkor may take it, 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."

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