Steinhoff International is considering the sale of part of a R58bn stake in its separately listed African operations as the crisis-hit retailer looks to shore up liquidity, according to two people familiar with the matter.
A disposal would follow the South African company’s sell-down of shareholdings in PSG Group and KAP Industrial, which have raised more than $1.2bn since an accounting scandal wiped 90% off Steinhoff’s share price. The owner of Conforama in France and Mattress Firm in the US is in talks with lenders about how to stay in business, and has sought to raise funds from non-core operations.
The sale of shares in Steinhoff Africa Retail (Star) would come via an accelerated bookbuild, said the people, who asked not to be identified as the discussions are still private. The move is yet to be approved by the financial regulator and may yet be abandoned, they said. The 77% stake is too large to be sold in one go and the company will initially look to off-load a small portion, according to the people.
Steinhoff has announced plans to refinance or redeem debt financing within the South African operations and is considering its options as to how to pursue that strategy, a spokesperson said in an e-mailed response to questions. STAR has agreed to gradually repay about R16bn of debt owed to its parent, and chief financial officer Riaan Hanekom told shareholders last week that the process is far advanced.
Steinhoff spun STAR off into a separate listed company in September. STAR’s shares plunged alongside its parent when Steinhoff first reported the accounting irregularities in early December, though have since clawed back about half the initial 30% fall as investors acknowledge the company’s own accounts have been audited and aren’t the focus of an ongoing probe by auditors at PwC.
STAR shares traded 2.9% lower at R21.90 at the close in Johannesburg on Monday, valuing the company at R76bn. Steinhoff fell 4.1% by 5.17pm in Frankfurt, where it moved its primary listing in 2015.
Bloomberg
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