Steinhoff raises R12bn in Europe
Consumer industry conglomerate Steinhoff International – which has had a primary listing on the Frankfurt Stock Exchange since 2015 and a secondary listing on the JSE — has taken advantage of low interest rates in Europe to raise R12bn in the euro-bond market.
Consumer industry conglomerate Steinhoff International, which moved its primary listing from the JSE to the Frankfurt Stock Exchange in 2015, has taken advantage of low interest rates in Europe to raise R12bn in the eurobond market.
On Tuesday, Steinhoff confirmed a successful debut placement of €800m of senior unsecured fixed-rate corporate bonds. It said the net proceeds from the bond issue would be used to repay debt as well as for “general corporate purposes”.
The bond, which has a term of seven-and-a-half years, holds an annual coupon rate of 1.875% and will be listed on the Luxembourg Stock Exchange.
Ratings agency Moody’s Investors Service has assigned a Baa3 (stable outlook) credit rating to the bond. This is in line with the long-term corporate rating assigned to Steinhoff.
Steinhoff said the bond had attracted strong interest when offered to institutional investors after a European road show. As a result, the placement was increased from the initial target range of €500-€750m, and the final order book was 4.2 times oversubscribed.
Lentus Asset Management chief investment officer Nic Norman-Smith said Steinhoff was a smart operator and wanted to take advantage of relatively low interest rates to lock in more attractive financing. “They have had a massive appetite for acquisitions … and now they are in the digestion phase.”
Steinhoff is ranked the world’s third-largest integrated household goods retailer by turnover, with about 50 brands and 12,000 retail stores in more than 30 countries.
The group recently confirmed it was considering the separate listing of its African retail businesses on the JSE. These businesses comprise the South African and African operations of Pepkor, JD Group and Unitrans Automotive as well as specialised operations like Steinbuild and Tekkie Town.