Steinhoff sells R3.75bn stake in STAR as coffers run dry

By John Bowker

(Bloomberg) – Steinhoff International Holdings NV raised R3.75 billion ($313 million) from the sale of shares in the embattled retailer’s African operations to further shore up its balance sheet following an accounting scandal late last year.

The move follows similar disposals of stock in South Africa’s KAP Industrial Holdings Ltd. and investment holdings company PSG Group Ltd. and brings the total generated from the three South African companies to about $1.6 billion. The fund-raising initiatives are enabling Steinhoff to buy time from creditors as the company struggles to recover from a 95 percent stock-price crash.

The owner of Conforama in France and Poundland in the U.K. sold 200 million shares in Steinhoff Africa Retail Ltd., known as STAR, reducing its stake to about 71 percent, it said in a statement Thursday. The settlement price was 18.75 rand a share, a 2.6 percent discount to STAR’s closing price in Johannesburg the previous day. Steinhoff spun off the unit last year, and the operation has been largely protected from the crisis that’s engulfed its erstwhile parent.

Steinhoff said Dec. 5 it had uncovered accounting irregularities and that Chief Executive Officer Markus Jooste has quit. PwC is investigating the accounts, with a particular focus on off-balance-sheet transactions related to the central Europe operations, and the company is being probed by a host of regulators and law authorities around the world.

The shares traded 4 percent lower at the close in Frankfurt, where the company moved its primary listing in 2015. Bloomberg News first reported the plan to sell STAR shares last month.

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