Steinhoff reassures market after shares continue to plunge
Retail conglomerate Steinhoff International’s “accounting irregularities” and postponement of its results have prompted the South African-headquartered, Frankfurt-listed retailer to reassure the market of its financial stability.
Shares in the retailer have plunged almost 80 per cent since the company’s recent announcements.
“The supervisory board has today given further consideration to the issues subject to the investigation and to the validity and recoverability of certain non-South African assets of the company which amount to circa EUR6bn,” Steinhoff said in a statement.
“The company wishes to provide additional comfort on the company’s liquidity. In this regard, the company has today received expressions of interest in certain non-core assets that will release a minimum of €1bn of liquidity.”
Steinhoff said the company’s subsidiary Steinhoff Africa Retail Limited (STAR) will now “formally commit” to the refinancing of its long-term liabilities due to the company.
“It is expected that the STAR refinancing will be concluded on better terms than those applicable to STAR’s current liabilities due to Steinhoff, given the strong cash flow inherent in its business.
“The additional liquidity of circa EUR2bn expected to be achieved through these measures will strengthen the company’s balance sheet and should provide additional comfort to stakeholders of the company’s ability to be able to fund its existing operations and reduce debt.”
The retailer – which is the parent of local furniture chains including Freedom and Fantastic Furniture – also said that based on current information, “there is no evidence to suggest” that the company’s chief financial officer had any involvement in the accounting matters currently under investigation by German prosecutors.
“Therefore, the Company wishes to confirm that its CFO, Ben La Grange, remains in his position. Ben La Grange has resigned from his position as CEO of STAR in order to focus solely on his role as CFO of the company at this time,” the company said in a statement.
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