Steinhoff International gains 6% on news of separate listing for Pepco
STEINHOFF International appreciated more than 6 percent on the JSE yesterday morning after the troubled retailer said it was seeking consents from its creditors to list Pepco Group as a separate entity.
Steinhoff said it decided to request the necessary consents after proceeding with an initial public offering (IPO), including the placement of shares held by Steinhoff in the Pepco Group.
“The determination to proceed with an IPO following the receipt of the consents will be made by the company in due course,” the group said.
Pepco Europe is a fast-growing pan-European discount variety retailer, which has more than 3 200 stores in 15 territories across Europe.
It owns the Pepco and Dealz brands in Europe and the Poundland brand in the UK.
In January, Steinhoff announced that the IPO evaluation process had resumed, with a range of strategic options under consideration.
The Pepco Group has been one of the strongest performers in Steinhoff’s portfolio, despite facing a difficult environment as a result of the December 2017 accounting scandal.
In its last results for the year to end September, Pepco reported a 3 percent increase in sales to €3.5 billion (R60bn), driven predominantly by store growth, with 327 net new stores opened in the period despite a significant Covid-19 impact, primarily in the third quarter of the financial year.
Pepco also generated €405 million operating cash flow during the period, despite the impact of Covid-19, up from €236m compared with a year earlier.
However, its net debt remained high at €1.24bn, including the IFRS16 impact of €911m.
Steinhoff’s latest request to its financial creditors comes after the group tabled a number of proposals to settle legacy litigation and various claims against it following the December 2017 accounting scandal which led to a more than 90 percent decline in its share price.
The group proposed a R16.5bn settlement to its creditors in July last year, with the majority of the lenders agreeing to the proposed settlement in November.
Steinhoff also received a major boost at the beginning of the month when it received support from four large active claimant groups for the implementation of its proposal to resolve multi-jurisdictional legacy litigation and claims against it.
The large active claimant group represent market purchase claimants based in South Africa and abroad.
The four consist of Burford Capital LLC, Deminor Recovery Services, SA/ DRS Belgium SC and DRRT/Therium.
Steinhoff has a primary listing on the Frankfurt Stock Exchange and a secondary listing on the JSE.
Steinhoff shares closed 0.47 percent higher at R2.12 on the JSE yesterday.