Holding company Steinhoff has withdrawn its plans to list US-based Mattress Firm, in a move unlikely to surprise investors.
The listing had been planned to raise capital but was delayed in 2022 as global markets slumped in the wake of interest-rate hikes.
The decision not to list the subsidiary means Steinhoff — whose debt exceeds assets — has even fewer ways to raise money to meet the €10bn debt obligations due in 2023.
Mattress Firm is the largest omni-channel mattress speciality retailer in the US with more than 2,300 stores across that country.
Steinhoff said “that in light of the ongoing volatility in the IPO market and following careful consideration with external advisers” it withdrew its registration statement with the US Securities and Exchange Commission on January 9.
This filing document was confidentially submitted in September 2021 and publicly filed in January 2022.
Steinhoff said it would reconsider listing Mattress Firm once markets were favourable, and that it was considering all options for the division.
Aware of impending debt repayments, Steinhoff announced in December that it had reached agreements with the main debt holders to take over 80% of the holding company and delist it. Should shareholders not agree to the deal leaving them with 20%, debt holders could take full ownership of Steinhoff.
It pays high interest rates of at least 10% on its debt, which places pressure on its subsidiary divisions to grow revenues at high levels to keep up with debt repayments.
In addition to Mattress Firm, Steinhoff owns about 50% of SA retailer Pepkor and has a majority stake in listed European and British discount retailer Pepco. It owns the homeware manufacturer and retailer Greenlit brands in Australia and New Zealand.
Steinhoff shares lost about 90% of their value in 2022, and plummeted on the news the company would delist and shareholders would be left with next to nothing.
The share dropped 5.56% in early morning trade to 51c.
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