Steinhoff property valuation comes in below expectations
Scandal plagued Steinhoff International has suffered another blow, revealing overnight that an independent valuation of one of its major property holding companies has delivered only half of the €2.2 billion (AUD$3.51 billion) it had previously estimated.
Steinhoff has previously flagged possible additional impairments of certain Steinhoff assets, subject to further investigation by auditors PwC.
Steinhoff engaged CBRE to put a value to properties held by its wholly owned subsidiary Hemisphere International Properties B.V. in a bid to determine what capital it could recover from assets amid the fall-out from a major accounting scandal.
The properties include stores, warehouses, offices, production sites and vacant land across Europe and the UK leased to the giant’s various retail operations.
As at 1 February CBRE has valued Hemisphere’s portfolio at just €1.1 billion (AUD$1.78 billion), around half of what Steinhoff had previously estimated, partly because under relevant accounting standards internal leases to Steinhoff entities are disregarded.
Steinhoff has now been forced to advise the market that the consolidated net book value of the Hemisphere portfolio will be “materially lower” than the guidance it previously provided.
“The Company will consider CBRE’s valuations in detail and will work with its auditors to determine the consolidated net book value of the Hemisphere Portfolio for the purposes of publication of the Company’s consolidated financial statements for 2017,” Steinhoff said in a statement.
Steinhoff was engulfed in an international scandal last year when accounting irregularities emerged in its business, sparking an investigation from German regulators.
The Frankfurt listed business has been reeling ever since, with a series of executives resigning and its share price tanking.
The Asia Pacific arm of the business, which owns the Freedom, Snooze and Fantastic Furniture businesses, has secured funding to continue trading.
Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.
After an 18-month review of APRA, the main music licensor businesses use to play music in their shops and cafes, th… https://t.co/piv36mwUb89 hours ago
Roughly two months after it announced a partnership with QBD Books, the Australian Geographic brand will launch its… https://t.co/2LBex5jMsK11 hours ago