Steinhoff shares on a rebound
Shares in Steinhoff jumped 55.8% yesterday, regaining some ground after calling on its lenders to help stabilise the company following the discovery of accounting irregularities last week.
Steinhoff has hired US investment bank Moelis & Company to advise it and asked management consultancy AlixPartners “to assist on liquidity management and operational measures”. “The group is asking for and requires continued support in relation to existing facilities from all its lenders to achieve an immediate stabilisation of the group’s financing,” Steinhoff stated.
The company has delayed its regular annual lenders’ meeting in London from December 11 to 19, having last week postponed its financial results.
Last Wednesday, it ordered an investigation into its accounts and said it had parted ways with its veteran CEO Markus Jooste.
There was some buying of the stock off a low base, but most investors were waiting for more information, said Independent Securities trader Ryan Woods. “On the positive side, it does look like Christo Wiese is doing a salvage job,” he added, referring to the retail group’s biggest shareholder and chairperson, who is temporarily at the helm. Wiese and Jooste were instrumental in reinventing Steinhoff, turning it from a modest distributor of furniture made in communist-era eastern Europe to a global household goods juggernaut, vying for market share with the likes of Ikea.
Steinhoff has been on a shopping spree since 2011, when it took over French furniture retailer Conforama. Last year’s string of acquisitions thrust it firmly on to investors’ radar screens.
Investec said its credit exposure to Steinhoff represented a small portion of its balance sheet. It had derivative exposures linked to the Steinhoff share price, where a trading loss could materialise. The maximum potential loss could be approximately 3% of Investec’s post-tax operating profit, although it could be as low as zero.
There was some buying of the stock off a low base, but most investors are waiting for more information. Ryan Woods Independent Securities trader