Jooste’s firm fights about sale

Former Steinhoff International CEO Markus Jooste’s investment company is locked in a battle over the SA candy and drinks maker it’s trying to sell, to repay defaulted debt.

Minority shareholders of Lodestone Brands are trying to block Jooste’s Mayfair Holdings from selling the producer of Rascals sweets and Fusion soft drinks, according to documents filed in the High Court in Johannesburg in March. Mayfair hired Standard Bank to auction the company, in which it holds a controlling stake, the filings show.

The legal challenge comes as Mayfair faces a year-end deadline to dispose of assets so it can repay bank debt of R959 million.

The loans were backed by Steinhoff shares, which collapsed after the retailer in December announced an investigation into a hole in its accounts, which resulted in Jooste quitting on the same day.

While Jooste also resigned as a Mayfair director shortly after his departure from Steinhoff, his family trust is the sole owner.

Stefan Potgieter, Jooste’s son-in-law, remains on the board and is leading the break-up of the company with a group of business-rescue experts.

Mayfair has about R1.4 billion worth of assets that can be disposed of, including real estate and race horses as well as its stake in Lodestone.

Mayfair is also owed about R620 million by at least 10 other investment companies.

Lodestone’s co-founders, who have offered to acquire the business through a management buyout, said that Mayfair is attempting to force through an exit that would jeopardise the future of the company and disadvantage other investors, according to their affidavits.

Standard Bank has identified 24 potential buyers and investors for Lodestone, the documents show.

In his legal response, Potgieter said the minority shareholders, who are being led by Gregory Senior, are attempting to secure Mayfair’s majority Lodestone stake at a lower price than would be achieved through an auction.

A competitive process would result in the highest possible sale price for all investors, regardless of who is successful, he said in documents. – Bloomberg