Steinhoff selling off

Steinhoff plans to sell about R7.5 billion of shares in investment firm PSG Group as it scrambles to plug a liquidity gap after it disclosed “accounting irregularities”.

In a separate development, the JSE said yesterday it may suspend trade in Steinhoff bonds if the company’s delayed financial results are not published before the end of February, which could complicate efforts to raise fresh debt.

The group, which owns more than 40 brands, such as Conforama, Mattress Firm and Poundland, said it would place around 29.5 million shares in PSG with institutional investors in an accelerated bookbuild. Steinhoff owns 16% of PSG, which has a total market value of around R60 billion.

Steinhoff last month shocked investors with the disclosure of what it said were irregularities in its accounts, wiping about $15 billion, or 85%, off its market value as it delayed its results.

However, it stated yesterday the placement would only go ahead if it achieved acceptable pricing. “Steinhoff will not dispose of the Placing Shares at all costs, as the Placing is being undertaken in order to be proactive and prudent.”

Sources familiar with the matter had told Reuters last month that Steinhoff was considering selling stakes worth a combined $1.4 billion in PSG Group and KAP Industrial to raise much-needed funds.

Steinhoff owns 39% of diversified industrial group KAP, which is worth around R22.4 billion at current market prices.

PSG Capital Proprietary Limited and The Standard Bank of SA Limited are acting as joint bookrunners for the placement in PSG shares.

Steinhoff faces new challenges on the debt front. Andre Visser, GM of Issuer Regulation, said the exchange could suspend trade in the company’s bonds over the results delay.

“In terms of the debt listings requirements, they have until 31 January to publish their year-end results. Failure to publish by the end of February could result in suspension.” – Reuters