Struggling retail holding investment company Steinhoff is looking to dispose of one of its best performing assets in discount retailer Pepco. Pepco is an internationally recognised retailer with over 2500 stores expanding over multiple jurisdictions. Steinhoff is still grappling with many of the issues that brought the retail giant to its feet as a result of accounting irregularities that came to light at the latter end of 2017. The company is dealing with a massive debt-burden as well as legal proceedings which are costing the group millions in advisor and audit costs. Although there are some valuable assets under the Steinhoff stable, a number of uncertainties remain surrounding the litigation battles the company finds itself in. We have seen similar situations play out in corporate scandals such as EOH and Tongaat, where the value of the company is somewhat permanently damaged following corporate governance issues. Corporate governance scandals often follow a lengthy and tedious process, where shareholders come off second best having to pay the brunt of advisory and legal fees. Â Justin Rowe-Roberts
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Steinhoff SENS statement:
Update on Pepco Group
Steinhoff International Holdings N.V. (“Steinhoff” or the “Company” and with its subsidiaries, the “Group”).
On 8 November 2019, the Group announced that it was considering and evaluating a range of strategic options for the Pepco Group, including a potential public listing. During the course of 2020 further announcements confirmed that the intention remained, but that the likely timing had inevitably been impacted by the Covid-19 pandemic.
The evaluation process has now resumed, with a range of strategic options under consideration. The process remains in its early stages and no definitive decision has been taken with respect to any specific course of action or timing at this point.
The Company has a primary listing on the Frankfurt Stock Exchange and a secondary listing on the JSE Limited.
