Steinhoff plummets after court sets January date

Steinhoff shares plunged the most in more than a month after the retailer said its settlement case would be heard by a Cape Town court only in January, in a blow to its plans to speedily wrap up all litigation against it and ensure survival.

The stock plummeted 14% to R2.40 on Thursday, the biggest drop since it slumped 22% on September 6.

That left the company once Europe’s second-biggest retailer, with just Sweden’s Ikea bigger with a valuation of R10.2bn. At the start of December 2017, before the exposure of the biggest corporate fraud in SA’s history, its valuation was close to R240bn.

Steinhoff’s bid to have the settlement case heard urgently in September failed when three groups which oppose the settlement and have other lawsuits against the company asked to join the matter. On Thursday, the court said the settlement case will be heard on January 24-26.

Steinhoff faces claims amounting to R184bn by European and SA shareholders who say they were misled into buying shares that lost about 90% of their value when accounting fraud was uncovered in December 2017. Former chair Christo Wiese and the state-owned Public Investment Corporation are among those that have approved the settlement.

The company has spent two years negotiating a settlement offer and avoiding bankruptcy. The settlement has been approved by creditors and the courts in the Netherlands and by the majority of claimants in SA. However, approval from the SA courts is still required.

The delayed hearing has affected some lenders’ deadlines, which required that a settlement be reached by September 30. The lenders’ agreement has now been amended without significant changes, Steinhoff said.

Bernard Mostert and Braam van Huysteen, who sold their firm Tekkie Town in return for Steinhoff shares, want the company liquidated.

Steinhoff has permission from the Reserve Bank to send proceeds to claimants, and it is under pressure to wrap up the settlement before this expires, so it can avoid the possibility of having to reapply.