South Africa’s JD Group cuts rights offer by 60%

JOHANNESBURG (Reuters) – South African furniture retailer JD Group on Wednesday cut the size of its planned rights offer by 60 percent, after agreeing to shift its funding to top shareholder Steinhoff International.

JD Group, which has been saddled with bad debts as cash-strapped consumers failed to make payments, had planned to raise around 2.5 billion rand ($240 million) through a rights offer.

But the company said it will now cut that to 1 billion rand, after controlling shareholder Steinhoff agreed to take over its funding needs.

By scaling back the size of the rights offer, furniture company Steinhoff may be able to keep the unit listed.

Steinhoff owned around 86 percent of struggling JD Group as of last month and a rights offer could have resulted in it raising its stake, forcing it to delist the retailer.

($1 = 10.4174 South African Rand)