Furniture retailer Steinhoff has placed 240-million Pepkor shares in a bid to raise capital as it stares down a €10bn debt burden.
This accounts for 6.5% of Pepkor shares in issue. Steinhoff holds 51% of Pepkor.
On successful conclusion of the placing, and assuming Steinhoff places all of the shares, Steinhoff will retain ownership of about 44.5% of Pepkor.
The placing will also increase the free float of Pepkor from about 49% to 55.5%. Free float refers to the shares in a company that can be publicly traded.
Steinhoff said it continues to view Pepkor as a strategic investment for the group.
The group’s €10bn debt is due in June and it is in complex negotiations with lenders for a longer period and has offered them 80% of the group’s equity in exchange for a restructuring of what it owes.
Steinhoff has been fighting for its survival since accounting fraud at the firm was revealed in December 2017, when it came to light that it had misstated both profit and asset values.
Former CEO Markus Jooste is among a group of four former Steinhoff executives who are set to go on trial in Germany in early May for the fraud.
Since the company’s auditors refused to sign off its accounts in late 2017, it has lost more than 99% of its value. While at one stage it was worth about R240bn, its market cap on the JSE is now just R1.9bn.
On Wednesday its share price fell 12% to 44c.
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