Steinhoff seeks R17.4 billion from Pepco’s IPO

International Holdings is looking to raise as much as 4.6 billion zloty (about R17.4 billion) by listing its European discount retail arm Pepco Group in Poland, capitalising on increased demand for discount goods amid the coronavirus crisis.

The South African retailer and other holders plan to sell 101.3 million existing shares, the company said yesterday.

Pepco, which won’t receive any proceeds from the offering, also struck agreements with lenders for €550 million (R9.5 billion) of new term loans and a €190 million revolving credit facility.

Shares will be marketed at 38 zloty to 46 zloty apiece. The deal will be priced on 14 May, with the new stock set to start trading in Warsaw on or about 26 May. The listing values Pepco at as much as 26.4 billion zloty.

After a spate of listings by companies benefiting from the shift to virtual sales, including Polish postal locker firm InPost, and British online shopping emporium THG in recent months, Pepco is one of the largest brick-andmortar retailers to tap the European IPO market.

Low-priced retailers have thrived over the past year, even with limited or no e-commerce. The global recession triggered by the pandemic has pushed more purchases online, but also accelerated the generational shift toward frugality and discounters that began during the financial crisis more than a decade ago.

Steinhoff, which was plunged into an accounting scandal in 2017, will list as much as 17.5% of Pepco. The offering includes an option to sell an additional 15.4 million shares if there’s sufficient demand. Steinhoff has been looking to sell or list the business for more than a year to raise funds to repay debt.

Pepco Group has more than 3 200 stores in 16 markets. Its operations include the Pepco discount clothing and decor chain and discount retail chain Poundland in the UK. –