Steinhoff has raised R7.3bn through the sale of portion of its stake in Pepkor as part a plan to raise money to fund a recently approved settlement deal for investors and shareholders who lost their money to SA's biggest corporate scandal.
The sale of 370-million shares, or 9.9% of Pepkor, at R19.75 each — a 9% discount to price before the launch of the placement — alongside the issue of an additional 300-million shares to investors who chose the stock rather than cash, will slash Steinhoff's holding in SA’s largest non-grocery retailer to about 50.1%, from 68.2%.
Shares in Pepkor slumped 7.88% to R2,000, on course for their biggest one-day drop since May 2020 and reflected the negative sentiment brought on by the so-called accelerated bookbuild. That is a share sale done with little to no marketing and is typically run at a discount to a company’s share price.
Steinhoff, which almost collapsed in SA’s biggest accounting fraud, faced more than 100 legal claims worth more than R130bn from shareholders who said they were duped into buying a worthless stock through misleading information. The company’s value plunged by about R200bn after the fraud was exposed in December 2017.
Facing bankruptcy from the sheer volume of claims, Steinhoff offered a settlement of €1.42bn (about R24bn) in August, up from the initial €943m offer in July 2020, hoping to end the court action. Those who voted in favour of the settlement payout have to withdraw all legal claims against the company.
The settlement, which was months in the making, last week received enough approval from all claimants who lost money in the collapse. The settlement offer must still go before the SA and Dutch courts for approval. It could face challenges in both courts by unhappy parties. /With Katharine Child and Tiisetso Motsoeneng
Correction: September 14 2021
The story has been republished to correct the second paragraph, which erroneously stated that the bookbuild would cut Steinhoff’s stake in Pepkor to 50.1% when in fact it is both the bookbuild and payment in Pepkor shares to claimants that will reduce the holding to that level. Business Day regrets the error.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.