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(STAR), the owner of iconic South African retail brands such as Pep and Ackermans, announced today that is has successfully raised R18-billion in funding from South African financial institutions.
The funding was used to repay its shareholder funding of R16 billion which was provided by Steinhoff International Holdings (Steinhoff) as part of STAR’s listing in September 2017. This facilitated the cancellation of all third party guarantees related to the financing of the shareholder funding.
The additional R2-billion raised – over and above what is required to settle the Steinhoff shareholder funding – is raised in line with STAR’s growth in operations.
Leon Lourens, STAR’s Chief Executive Officer, stated that “STAR has some of the top retail brands in South Africa and has a successful and established track record of providing value to its customers. The refinancing provides a platform from which we can grow our business to its full potential. We appreciate the confidence the banks have placed in us in this regard.”
Jayendra Naidoo, STAR’s Chairman, added that “STAR is now independently financed with direct financing facilities with the banks, enabling STAR to take advantage of its strong business model and excellent growth opportunities. The refinancing is another important milestone for the company and its employees.”
Financing the new facilities
Of the R18-billion raised, R12-billion will be financed with between three and five year repayment terms at interest rates that are in line with current rates.
The remaining R6-billion will be funded through preference shares issued to South African financial institutions. The preference shares are issued to facilitate the redemption of Steinhoff’s preference shares and to enable STAR’s release from guarantees applicable to these.