Steinhoff’s Stellenbosch, Cape Town, branch.
JOHANNESBURG - Steinhoff International has raised R3.75 billion in an accelerated bookbuild through the sale of a 5.8percent stake in Steinhoff Retail Africa (STAR) to ease liquidity problems and reduce debt.

The troubled retailer yesterday said it had sold 200 million shares in STAR to reduce its total shareholding to 71.01percent from 76.81percent. Settlement of the placing was expected to occur on Tuesday.

“Steinhoff has successfully placed the shares at a price of R18.75 per placing share, raising total gross proceeds of R3.75bn,” Steinhoff International said.

“The book of demand was multiple times oversubscribed and the placing price represents a discount of 2.6percent to the STAR closing price of R19.26 on Wednesday.”

The sale comes in the wake of a tumultuous period for the group, after it admitted to financial irregularities in December, which led to a 90percent decline in its share price and wiping off more than R200bn from its market capitalisation.

The fallout over the scandal led to the resignation of chief executive Markus Jooste and chairman Christo Wiese.

Denker Capital portfolio manager Kokkie Kooyman said the sale would help Steinhoff to raise capital, but would come at a cost, as the stake was being offloaded below the prevailing share price.

“Whether it will be enough is a different question, because it depends on how much debt they have and whether they will be generating positive cash flow,” Kooyman said. “From what I have heard, I think it will help, but will not be enough.”

The news lifted the group’s share price as it traded 12.86percent higher on the JSE yesterday morning to R2.72 a share, up from Wednesday’s closing price of R2.41, while STAR’s share price was down by 2.39percent.

Steinhoff has already re- duced its shareholding in both KAP Industrial Holdings and PSG Group. The retailer sold 450 million ordinary shares in KAP Industrial last month in an effort to raise more than R3.8bn and 20.6 million shares in investment firm PSG Group to raise R4.7bn in December.

Steinhoff has more than 40 retail brands across the globe, which include Conforama in France, Mattress Firm in the US, Poundland in the UK and Fantastic Holdings in Australia.

The group is yet to release its financial year-end results, and PwC was roped in to facilitate that process and help with the investigation.

This week, reports emerged that more investors, including farmworkers, had seen their investments crashing after the collapse of the retailer.

The group has so far succeeded in raising some cash, and in January its lenders in South Africa made R2.97bn available, and US investment firm Davidson Kempner was said to have provided a loan facility of £180m (R3.067bn) to its subsidiary Pepkor Europe.

In December 2017, Mattress Firm said it succeeded in obtaining a new $75m (R901m) asset-backed financing for its business, which includes the option to upsize the financing up to $225m, subject to certain conditions.

Conforama reached an agreement in January to sell its 17percent stake in Showroomprivé for about $79m.

Ashburton Investments fund manager Suvasha Kander said although the sold STAR stake was relatively small, it would assist with raising some liquidity for the company.

“Steinhoff remains the controlling shareholder of STAR with an approximate 71 percent holding,” she noted.

Steinhoff shares yesterday closed 1.66percent higher on the JSE at R2.45.