* PwC feedback confirms irregularities identified by Deloitte
* Extent of increase in impairments still being calculated
* Steinhoff has paid down African group debt
* To present restructuring plan on May 18 (Adds debt, restructuring and litigation detail)
JOHANNESBURG, May 10 (Reuters) - South African retailer Steinhoff said on Thursday that an investigation by auditors PwC had found that overstatement of its profits may result in additional material impairments, sending its shares down more than 16 percent.
The announcement is the latest setback for the retailer which is fighting to recover from the fallout from accounting irregularities discovered in December.
Steinhoff, which runs chains such as Britain's Poundland, Mattress Firm in the U.S. and Conforama in France, has hired auditors PwC to investigate its problems and the accounting firm has gathered millions of records.
Steinhoff said in April initial findings from PwC's investigation had revealed that a pattern of transactions over "a number of years" led to a "material overstatement of income and asset values."
On Thursday Steinhoff said in a statement: "The PwC feedback substantially aligns with and confirms the irregularities identified by Deloitte."
"It has since emerged that the expected overstatement of profits and the accounting treatment of related parties may also result in material additional impairments of intangible and other assets."
PwC's investigation is looking at the validity and recoverability of certain non-South African assets which were initially estimated to be worth around 6 billion euros ($7.16 billion), according to Steinhoff.
The size of the additional impairments is still being calculated and will be presented in June when Steinhoff publishes half-year results.
Steinhoff's shares fell more than 16 percent, before paring losses to close 3.87 percent lower at 1.74 rand.
Steinhoff is also trying to renegotiate its debt and is likely to sell assets as part of any restructuring plan, newly appointed finance head Philip Dieperink said in April.
Steinhoff said at the end of March its total borrowing amounted to approximately 10.4 billion euros, with about 8.7 billion attributable to Europe, about 1.4 billion attributable to South Africa and 25 million to the U.S. operations.
Steinhoff said in South Africa, at the African group level, it had repaid a further 200 million euros since March 31 and anticipated that repayment of the African group debt would be completed shortly.
In Europe and the United States, it said discussions with the numerous lenders were progressing and the company planned to present its restructuring plan to them at a meeting due to be held in London on May 18.
Steinhoff said it had been relying on asset sales to fund working capital, interest and professional advisers' fees but this was not sustainable.
"Accordingly, the restructuring plan will include the group's proposals for the management of cash flows and ongoing working capital requirements."
Steinhoff is also facing various lawsuits. Shareholder rights group VEB is suing it along with banks that prepared its stock market flotation in Frankfurt in 2015. Former chairman and biggest shareholder Christo Wiese filed a 59 billion rand ($4.78 billion) lawsuit late in April.
On Thursday, Steinhoff said it has also received a claim of about 100 million euros from entities connected with co-founder of FirstRand GT Ferreira and about 120 million euros from Tekkie Town vendors.
"If and when initiated, these claims will be considered in the context of the group's anticipated restructuring," it said. ($1 = 0.8386 euros) ($1 = 12.3479 rand) (Reporting by Nqobile Dludla Editing by James Macharia/Keith Weir and Jane Merriman)