Steinhoff International Holdings N.V. : RESTRUCTURING UPDATE

RESTRUCTURING UPDATE

Steinhoff International Holdings N.V. (the "Company" and with its subsidiaries, the "Group")

Introduction

Further to the Company's announcement on 29 June 2018 confirming the amendment and extension of the formal letters of support entered into by the Company, Steinhoff Europe AG ("SEAG") and Steinhoff Finance Holding GmbH ("Finance Holding") and certain of their creditors (the "Amended Support Letters"), the Company is pleased to announce that it has today launched a consent process for a lock-up agreement (the "LUA") in connection with the restructuring of the financial indebtedness of the Company, SEAG, Finance Holding and Stripes US Holding Incorporated ("SUSHI") (the "Restructuring"). The LUA includes both the term sheet for the Restructuring (the "Term Sheet") and the steps plan for its implementation (the "Steps Plan").

The launch of the LUA marks the culmination of several weeks of discussions with the ad hoc committees of third party creditors of SEAG, SUSHI and Finance Holding and the coordinating committee in respect of the Group's European creditors and represents an important step in the Restructuring process. Once the LUA becomes effective in accordance with its terms, the creditors and the Company will seek to implement the Restructuring within three months (subject to any agreed extension). Once the Restructuring has been implemented, the terms of the Restructuring (as set out in the Term Sheet) will remain in place for three years (subject to a maturity long stop date of 31 December 2021).

If sufficient creditor support for the LUA is not obtained and the LUA does not become effective in accordance with its terms by 20 July 2018 (being the date on which the support period under the Amended Support Letters will terminate, absent any extension or other form of creditor support), the Boards of SEAG and Finance Holding will need to assess their options (including local reorganisation procedures) and obligations under the applicable Austrian law. Creditors are therefore encouraged to accede and become party to the LUA as soon as possible and, in any event, by 8.00pm London time on 16 July 2018 to ensure that the LUA becomes effective in good time and to qualify for the Lock-Up Early Bird Fee (as defined below). Further detail on the conditions precedent to the LUA and the Lock-Up Early Bird Fee are set out below.

THE SUMMARY BELOW SETS OUT A HIGH-LEVEL OVERVIEW OF THE LUA, TERM SHEET AND STEPS PLAN. STAKEHOLDERS ARE ENCOURAGED TO REVIEW THE DOCUMENTS IN DETAIL THEMSELVES (COPIES OF WHICH ARE AVAILABLE AT WWW.LUCID-IS.COM/STEINHOFF AND ON A&O COLLABORATE FOR PRIVATE SIDE CREDITORS WHO HAVE ACCEDED TO THE FTI COMMON PLATFORM) AND SEEK THEIR OWN LEGAL AND FINANCIAL ADVICE SHOULD THEY HAVE ANY QUERIES IN RELATION TO THEIR CONTENTS.

Overview of the LUA

The LUA has been signed by, among others, the Company, Finance Holding, SEAG, SUSHI and Steinhoff International Holdings Proprietary Limited ("SIHPL") (together, the "Obligors" and being the principal borrowers, issuers and guarantors of the external debt of SEAG, SUSHI and Finance Holding) and certain other Group companies as intra-Group lenders to Finance Holding, SEAG and/or SUSHI (together the "Intercompany Participants" and, with the Obligors, the "Group Parties"). The LUA, among other matters, imposes agreed limited recourse and standstill obligations on relevant internal and external creditors to facilitate the implementation of the Restructuring by providing the Group and its stakeholders with a period of stability whilst the relevant documents are negotiated, and arrangements put in place to effect the Restructuring.

Effectiveness of the LUA

The LUA is conditional and will only become effective when, among other things:

- the Group Parties have signed the LUA;

- more than 85% of the aggregate outstanding SEAG external financial indebtedness (or such lower percentage as more than 50% of the SEAG external creditors who have signed the LUA at that time may determine, provided such percentage is no lower than 75%) becomes subject to the LUA;

- more than 75% of the SUSHI external financial indebtedness (or such lower percentage as SUSHI, SEAG, Finance Holding and the Company may determine) becomes subject to the LUA;

- more than 75% of the nominal amount of each of the series of convertible bonds due 2021, 2022 and 2023 issued by Finance Holding (respectively the "2021, 2022 and 2023 Series") becomes subject to the LUA; and

- the directors of Finance Holding and SEAG have each established a "positive going concern prognosis" as a matter of Austrian law, subject to the LUA becoming effective in accordance with its terms.

Consent Fee

Creditors who sign up to the LUA ("Participants") will, subject to certain terms and conditions under the LUA, be:

- eligible for an early bird fee (the "Lock-Up Early Bird Fee") equal to their pro-rata share of:

- for creditors of SEAG and SUSHI, 0.5% of all locked-up SEAG and SUSHI debt less the fees payable in connection with the SEAG Amended Support Letter; and

- for creditors of Finance Holding, 0.85% of all locked-up Finance Holding debt less the fees payable in connection with the Finance Holding Amended Support Letter,

in the event that they accede to the LUA by 8.00pm London time on 16 July 2018 (or such later date determined by the Company) (the "Lock-Up Early Bird Fee Deadline"). The Lock-Up Early Bird Fee is subject to certain terms and conditions, including a requirement for requisite majorities of Participants to have become party to the LUA by the Lock-Up Early Bird Fee Deadline; and

- entitled to a lock-up fee (the "Lock-Up Fee") equal to:

- for creditors of SEAG and SUSHI, 0.5% of their locked-up SEAG and SUSHI debt; and

- for creditors of Finance Holding, 0.15% of their locked-up Finance Holding debt.

The Lock-Up Fee is payable to each creditor who becomes a Participant by 5.00pm London time on the earlier of: (i) 2 Business Days (as defined in the LUA) prior to the date of the implementation and completion of the Restructuring; and (ii) the voting record date in relation to any scheme meeting or creditors' meeting relating to the debt held by any such Participant.

The Lock-Up Early Bird Fee and the Lock-Up Fee shall be capitalised and added to the principal amount of the reinstated debt in accordance with the Term Sheet upon the implementation and completion of the Restructuring.

SEAG and SUSHI Roll-over and Maturity Fees

Each Participant that remains a Participant on the date of the implementation and completion of the Restructuring (the "Restructuring Effective Date") who:

- holds SEAG/SUSHI debt that has been rolled-over until the Restructuring Effective Date solely during the period commencing on 1 January 2018 and ending on the Restructuring Effective Date will be entitled to receive a fee equal to 1% of such SEAG/SUSHI debt; and/or

- holds SEAG/SUSHI debt with a contractual maturity date during the period commencing on 1 January 2018 and ending on the Restructuring Effective Date and who has agreed to extend the contractual maturity date of such debt until the Restructuring Effective Date, will be entitled to receive a fee equal to 1% of such SEAG/SUSHI debt.

The rollover and maturity fees identified above will be capitalised and added to the principal amount of the reinstated debt in accordance with the Term Sheet upon the implementation and completion of the Restructuring.

Accession to the LUA

Creditors of Finance Holding, SEAG and/or SUSHI may accede and become a party to the LUA in respect of all (but not less than all) financial indebtedness of Finance Holding, SEAG and/or SUSHI of which they are a beneficial owner by executing an accession letter to LUA.

Lucid Issuer Services Limited has been appointed as the calculation agent (the "Calculation Agent") for the purposes of the LUA. A copy of the LUA is available on the Calculation Agent's website at www.lucid-is.com/steinhoff and on A&O Collaborate for private side creditors who have acceded to the FTI common platform, together with instructions on how to execute an accession letter to accede to the LUA.

Any queries regarding the accession process in relation to the LUA should be directed to the Calculation Agent at: Lucid Issuer Services Limited, Tankerton Works, 12 Argyle Walk, London, WC1H 8HA, T: + 44 20 7704 0880, E: steinhoff@lucid-is.com.

Overview of the terms of the LUA

The LUA imposes agreed limited recourse and standstill obligations on Participants and Intercompany Participants and secures their support for the Restructuring for the period ending on the earlier of: (i) the Restructuring Effective Date; (ii) the date falling three months from the date on which the LUA comes into effect (which may be extended in certain circumstances); and (iii) the date on which the LUA is terminated in accordance with its terms (the earliest of (i) to (iii) being the "End Date").

Under the terms of the LUA:

- each Participant and Intercompany Participant agrees that indebtedness owed to them by SEAG and/or Finance Holding shall be subject to limited recourse terms for the period commencing on the date on which the LUA becomes effective in accordance with its terms and ending once certain events have occurred;

- each Participant and Group Party undertakes to support, facilitate and implement the Restructuring in accordance with the Term Sheet and Steps Plan, including entering good faith negotiations to agree the definitive transaction documents, until the End Date;

- the Obligors give undertakings to the Participants in respect of various matters including the incurrence of further indebtedness, the granting of security and making material disposals, as well as agreeing to treat the Group's creditors on a fair and consistent basis having regard to such creditors' contractual rights;

- no Participant or Group Party will take any enforcement action in respect of the financial indebtedness of Finance Holding, SEAG or SUSHI prior to the End Date;

- Participants may not assign any voting rights or interest in any such financial indebtedness unless the transferee accedes to the terms of the LUA;

- each Participant consents to the roll-over or the extension of the maturity date in respect of any financial indebtedness of Finance Holding, SEAG or SUSHI falling due prior to the End Date;

- the Company agrees to consult with the governance working group in order to agree on certain governance changes within the Group (see overview of Term Sheet - Review of and changes to the governance of the Company below); and

- the Company agrees, as part of the terms of any restructuring agreed with creditors of Hemisphere International Properties B.V. ("Hemisphere") regarding a restructuring of Hemisphere's debts, that in relation to the rights and recourse of those lenders or Hemisphere against the Company, such terms shall not be more favourable in any material respect to the lenders to Hemisphere than those produced by the Restructuring, without the requisite consents of the SEAG, SUSHI and Finance Holding locked-up external creditors.

Overview of Term Sheet

The Term Sheet sets out: (i) certain proposed changes to the governance of the Group; (ii) the proposed revised terms of the various debt instruments of each of the SEAG, SUSHI and Finance Holding debt clusters; and (iii) certain related amendments in relation to the guarantees of such debt instruments provided by the Company.

Group Governance

Review of and changes to the governance of the Company

A governance working group has been established from certain creditor representatives to work alongside the Company's Nominations Committee to consult on matters including changes which could be introduced to the composition of the Supervisory Board and the Management Board of the Company (the latter to comprise no more than five individuals).

The search for new candidates for the Company's boards shall be led by the Nominations Committee in consultation with the governance working group and a shareholders' meeting will be convened in due course to seek approval from shareholders for the appointment of any suitable candidates identified through the search process (the "Governance Shareholder Resolution").

In addition, a litigation committee will be established by each of the Company's boards to oversee material litigation claims in respect of the Group.

Review of and changes to governance of the SEAG cluster

As part of the revised terms of the SEAG debt, the Group has agreed to make certain changes to the governance of the entities within the SEAG cluster:

- a new holding company ("New Holdco") is to be inserted into the Group structure aboveSEAG's immediate parent company, Steinhoff Mobel Holdings Alpha GmbH ("Mobel");

- SEAG creditors will have the right, in consultation with the Company, to nominate up to 4 appropriately qualified individuals to be appointed to the board of New Holdco which will have a board comprising 6 directors in total (2 directors will be nominated by the Company). The boards of SEAG and Mobel will be similarly constituted; and

- the board of New Holdco will have the ability to determine the composition of the boards of the operating companies in the SEAG cluster.

Changes to governance of Finance Holding and SIHPL

As part of the revised terms of the Finance Holding and SIHPL debt, the Group has agreed to make certain changes to the governance of the following entities:

- two members of the Management Board of Finance Holding will be appointed by the Company's Management Board following any changes made pursuant to the governance review process referred to above; and

- changes will also be made to the composition of the board of SIHPL, a guarantor of the 2021 and 2022 Series, to include a representative nominated by the holders of the 2021 and 2022 Series.

Revised debt terms

The following terms are intended to apply across all of the SEAG, SUSHI and Finance Holding private debt with effect from the Restructuring Effective Date:

- Amount of restated debt

- External debt to be restated at par plus accrued interest and agreed fees.

- SEAG and SUSHI external debt split between SEAG 1^st and 2^nd tranches (with each tranche split into 1^st and 2^nd lien). SEAG intercompany debt owing to Steinhoff Africa Holdings Pty Ltd ("SAHPL") and the net intercompany debt owing from SEAG to Finance Holding shall be restated as 2^nd lien debt and recorded at par plus accrued interest as at 31 March 2018. Intercompany debt owing to AIH Investment Holding AG ("AIH") may (subject to an alternative structuring solution in relation to that debt being agreed) be restated as priority 2nd lien debt. Other intercompany debt to entities within the SEAG group to remain unsecured but the entities will receive the benefit of support arrangements from SEAG.

- Finance Holding external debt and debt owing from Finance Holding to SIHPL to be 1^st ranking. Intercompany debt owing from Finance Holding to Steinhoff Investment Holdings Ltd to be 2^nd ranking debt.

- Creditor recoveries for SEAG (including SUSHI) and Finance Holding are capped at par plus accrued interest (including PIK interest - see below) and fees.

- Coupon

- 10% PIK per annum (capitalising semi-annually).

- The PIK interest rate increases to 15% if the Governance Shareholder Resolution is not passed.

- Maturity

- Maturity is 3 years from the Restructuring Effective Date both for external and intercompany debt, subject to a maturity long-stop of 31 December 2021.

- Security

For SEAG (in respect of external debt and intercompany debt to SAHPL, AIH (if applicable) and Finance Holding) this is expected to include:

- 1^st ranking security over shares, receivables and bank accounts of SEAG, shares held by SEAG in subsidiaries and other assets of SEAG;

- 1^st ranking security over shares in, as well as guarantees and asset security from, New Holdco, Mobel and SUSHI;

- 1^st ranking security over shares in Steinhoff UK Holdings Ltd and intermediate holdcos above SEAG operating companies; and

- limited recourse guarantees given by and asset security given by SEAG operating companies where possible and subject to consents.

For Finance Holding, security over the shares of Finance Holding and Hemisphere as well as security over other Finance Holding assets, but excluding shares in New Holdco and Mobel.

- Undertakings regarding material asset disposals - SEAG

- Asset disposals by SEAG or its subsidiaries or SUSHI will be initiated at the discretion of the board of New Holdco and will require majority approval from 2^nd lien SEAG creditors and the Company's shareholders if required by Dutch law or the Company's constitutional documents.

- Where approval by the Company's shareholders is required for such asset disposals, the Company shall seek such approval unless it considers the terms of the transaction to effect the relevant asset disposal to be clearly unreasonable.

- If shareholder approval is not obtained, a mandatory prepayment event will occur under the SEAG debt documents (with SEAG required to make payment within 12 weeks in an amount equal to the estimated net proceeds of the proposed sale). If the Company raises the funds to enable SEAG to meet the prepayment, the security over the relevant asset shall be released and the asset will remain within the Group and be held directly by the Company. If the prepayment is not made, an event of default will occur under the relevant SEAG security document with respect to the relevant asset in order to effect a sale of that asset.

- New money - SEAG

- Any new debt being raised by the Company, SEAG or Finance Holding shall be offered pro rata to the creditors of SEAG and Finance Holding, provided that if the Group is offered better terms than those offered by the creditors of SEAG and Finance Holding, the Group has the ability to accept such terms.

- Incremental new money debt basket to be structured on 'last in first out' basis.

- Cash pay-out and prepayment - Finance Holding

- Reasonable endeavours to make a cash paydown by SIHPL as guarantor in the region of 25% on 2021 and 2022 Series by 31 March 2019.

- Undertaking to consider on an ongoing basis, and at least quarterly, opportunities to make further cash pay outs from SIHPL, based on a quasi-liquidation distribution methodology.

Guarantees for the restated SEAG and Finance Holding debt

The following terms have been agreed with regard to amending the guarantees provided by the Company that currently support certain of the external debt of SEAG and Finance Holding and the guarantee provided by SIHPL and will apply with effect from the Restructuring Effective Date:

- Scope of Company guarantees

- Guarantees in respect of guaranteed SEAG, SUSHI and Finance Holding debt crystallise on the Restructuring Effective Date at restated debt amounts (excluding the support letter consent fees).

- For SEAG and SUSHI guaranteed creditors, the Company guarantees remain fully outstanding until the maximum amount payable by the Company under the guarantees has been paid by it or an amount has been received by the SEAG guaranteed creditors equal to restated debt plus PIK interest capped at 5% (with an increase to 10% if Governance Shareholder Resolution is not passed).

- For Finance Holding debts, there is no equivalent PIK interest cap, unless the Governance Shareholder Resolution is not passed (in which event the cap is 10%).

- Creditor recoveries under the Company guarantees are capped at the amount of restated debt obligations plus PIK interest (subject to the PIK interest caps (where applicable) and agreed fees) provided that the aggregate amount paid under the Company guarantees shall not exceed the restated debt amounts plus accrued, deferred, rolled-up and/or subordinated interest and fees (excluding any support letter consent fees) at the Restructuring Effective Date.

- Company has agreed a negative pledge as well as certain restrictive undertakings regarding the operations of the Company and certain of the South African subsidiaries as well as certain covenants regarding debt incurrence and future acquisitions.

- SIHPL Guarantee

- 2021 and 2022 Series also benefit from crystallised guarantee claim against SIHPL.

Overview of the Steps Plan

The Steps Plan sets out the steps that will be required to implement the Restructuring, as envisaged by the Term Sheet, on a contractual basis with the various creditors groups. However, given the complexity of the Group's debt instruments and number of creditors involved, it may not be possible for the Group to achieve the relevant approval thresholds for a contractual implementation. Therefore, the Steps Plan sets out the steps required for the Group to make use of certain restructuring procedures under applicable law that may facilitate the implementation of the Restructuring with lower approval thresholds required to bind dissenting or non-consenting creditors (assuming the statutory approval thresholds and other requirements are met).

Shareholders and other investors in the Company are advised to exercise caution when dealing in the securities of the Group.

Stellenbosch, 11 July 2018