Retail scandal Steinhoff African unit to repay Sh123 billion loan
Business
By
Reuters
| Dec 17, 2017
Steinhoff’s African business is preparing to repay $1.2 billion (Sh123b) it owes to its parent, it said on Friday, a move that would go a long way to plugging a liquidity hole in the group fighting for survival in the wake of an accounting scandal.
Steinhoff, the owner of more than 40 retail brands including Conforama, Mattress Firm and Poundland, is seeking to raise $2.4 billion to shore up its finances.
More than $10 billion has been wiped off Steinhoff’s market value in the last two weeks following its disclosure of accounting irregularities and its chief executive’s exit.
Steinhoff Africa Retail, spun off this year, said it had appointed FirstRand’s Rand Merchant Bank to arrange the refinancing of about 16 billion rand ($1.19 billion) in shareholder loans from the parent company.
Reuters had reported on Tuesday that Steinhoff was also considering selling its stakes worth $1.4 billion in PSG Group and the KAP Industrial to fill the hole in its balance sheet.
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Steinhoff is working with turnaround specialist AlixPartners to help maintain its liquidity. It has also hired US investment bank Moelis & Co to help it prepare for a delayed meeting with lenders in London next week to discuss its financial health.
The accounting scandal has led to the resignation of both Chief Excutive Markus Jooste and chairman and top shareholder Christo Wiese, figures who played a key role in transforming Steinhoff from a modest furniture distributor to a global household goods giant, vying with the likes of IKEA. Wiese, who stood in as chief executive last week, stepped down on Thursday.
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