Pepco listing set to raise R15bn

Steinhoff International, which is still battling to recover from the accounting scandal that cost investors billions of rand, says it will raise about €900m (R15.34bn) when it lists discount retailer Pepco in Warsaw later this month. Steinhoff said on Friday that it will sell about 102.3-million shares in the initial public offering for €8.80 each, which should reduce its stake to 78.9% from 98.9%.

Steinhoff International, which is still battling to recover from the accounting scandal that cost investors billions of rand, says it will raise about €900m (R15.34bn) when it lists discount retailer Pepco in Warsaw later this month.

Announcing the pricing of the listing on Friday, Steinhoff said it will sell about 102.3-million shares in the initial public offering for €8.80 each, which should reduce its stake to 78.9% from 98.9%.

The final offer price implies a total equity value for Pepco Group of €5bn, with the listing set for May 26. The discount retail group caters to more than 50-million customers a month at more than 3,200 stores across 16 EU countries.

The group owns the Pepco and Dealz brands in Europe, and the Poundland brand in the UK.

Steinhoff, which has a primary listing on the Frankfurt Stock Exchange and a secondary listing on the JSE, is seeking to reduce its debt burden, which stood at €9.46bn in its 2020 financial year.

Rocked by one of the biggest corporate scandals in recent years, the company has previously said it was also weighing the option of listing the Fantastic Group, Australia’s furniture and bedding retailer.

The SA company is saddled with legal claims amounting to more than R130bn, which stem from the precipitous decline in its share price in late 2017 when news of an accounting scandal came to light, prompting the resignation of then CEO Markus Jooste. The debt load continues to pose an existential threat to the group, which is still battling to recover from the scandal.

Steinhoff has proposed $1bn (R14.1bn) to settle legal claims worth more than R130bn from shareholders who sued on grounds that they had been misled into buying almost worthless shares.

It is also facing a court bid from former owners of discount retail footwear and apparel company Tekkie Town to liquidate the company but has said it will “vigorously defend” its settlement plan.

On Friday Steinhoff’s shares ended 4.64% higher at R2.03.

STEINHOFF SELL ABOUT 102.3-MILLION SHARES IN THE INITIAL PUBLIC OFFERING FOR €8.80 EACH, WHICH SHOULD REDUCE ITS STAKE TO 78.9%