Steinhoff raises R7.3 billion from selling 10 percent of crown jewel Pepkor Holdings

Group says its interest in fashion stores would be reduced to about 50.1 percent from 68.2 percent

STEINHOFF said it had raised R7.3 billion from the sale of 370 million Pepkor shares towards the settlement of the 2017 share price crash that cost shareholders billions of rands.

Steinhoff shares closed 3.38 percent higher, while Pepkor shares fell by 7.96 percent on the JSE yesterday.

Steinhoff is essentially selling its crown jewel to help fund the R25 billion settlement, which was approved by shareholders during creditors class meetings held last week.

Steinhoff late on Monday announced the disposal of 10 percent of Pepkor, the owner of discount fashion stores and Pep and Ackermans, through the sale of up to 370 million Pepkor shares.

The group said its interest in Pepkor would be reduced to about 50.1 percent from 68.2 percent following the conclusion of the placing.

Steinhoff said the shares were placed at a price of R19.75 per share, a 9 percent discount to the pre-launch closing share price of ordinary shares of no par value in Pepkor at market close on Monday. “Steinhoff continues to view Pepkor as a strategic investment for the group, but will conclude the placing in line with the objective of facilitating the implementation of the proposal,” said Steinhoff.

The sale of the shares comes days after Steinhoff received overwhelming support for the settlement from shareholders from both South Africa and the Netherlands last week. The company now awaits the green light from courts in South Africa and the Netherlands.

Steinhoff said in line with its intention to retain the remaining interest in Pepkor, it had agreed to a 180-day lock-up period, “except in the case of any Pepkor shares delivered after the date of this announcement to claimants that were not eligible for the proposal, provided that any Pepkor shares received by such claimants will be subject to a 180-day lock-up beginning from the day such Pepkor shares are received”.

Meanwhile the retailer faced its liquidation hearing yesterday.

Tekkie Town founders approached the court for the winding up of Steinhoff after its founders were “duped” into accepting restricted Steinhoff shares in exchange for a controlling interest in Tekkie Town.

Steinhoff argued for the postponement of the liquidation. The group said it was challenging the decision by the Western Cape High Court to allow the liquidation hearing to proceed, citing that it did not have jurisdiction to do so. The hearing continues today. The Public Investment Corporation (PIC), which manages more than R1 trillion in assets on behalf of State pension funds, last week said it had entered into a settlement agreement to support the implementation of the Steinhoff global settlement.

“The PIC believes the proposed settlement is in the best interests of its clients, given the alternative cost of protracted litigation and related uncertainties, and the prospect of further diminishing share value. I

“It attempts to provide certainty and will allow Steinhoff the opportunity to recover as a company, to continue trading as a going concern and to avoid further job losses,” said the PIC. It also said details of the proposed settlement agreement could only be disclosed once due legal process has been concluded.