CAPE TOWN - Steinhoff reportedly failed to inform investors of the discord and claims from Tekkie Town vendors drawing up to the private placement of Steinhoff Africa Retail (Star) shares that took place last month.
This comes after Steinhoff announced on April 11 that it was aiming to place 200 million shares in Star in order to mitigate the liquidity scandal that it was facing.
According to reports, the Steinhoff board was aware of the claims surrounding Tekkie Town’s acquisition and bonus scheme in March. Notably, this was a week before the Star book build was conducted, Moneyweb reported.
A letter that was reportedly written on March 28 was directed to Star management, Jayendra Naidoo and Leon Lourens. The letter reportedly noted a bonus scheme which was based on the performance of Tekkie Town under Steinhoff’s ownership. This scheme was reportedly agreed to by former Steinhoff CEO, Markus Jooste. It was then reportedly revised by former Star CEO, Ben la Grange.
Another letter dated March 28 was reportedly aimed to Steinhoff chairperson Sonn and ccting CEO Van der Merwe. This letter reportedly summarises the transaction where Steinhoff acquired Tekkie Town in 2016.
Interestingly, the letter ends off with a sort of warning and says that Steinhoff should practice caution in dealing with Tekkie Town assets or shares and should only engage in dealings with Tekkie Town when the matter has been settled.
However, just last week, STAR) said on Sens that it had taken note of the claim lodged by founders and original shareholders of Tekkie Town against Steinhoff International, the troubled firm reeling from an accounting scandal.
STAR clarified that this claim was not against STAR and that STAR was an independently listed company.
Tekkie Town, originally acquired by Steinhoff International in 2016, was sold to STAR in 2017 prior to its listing. Tekkie Town, one of Steinhoff’s subsidiaries, filed papers in the Western Cape High Court to have its R3.2 billion acquisition by the troubled retailer reversed. The group had received a demand from Tekkie Town amounting to about €120 million (R1.75 billion).
Meanwhile, Steinhoff shares got a major boost. Steinhoff International's share price climbed more than 16.25percent on the JSE after the group said it would publish its half-year results on June 29.
The share price climbed to R1.86 a share on Friday afternoon, moments after concluding the meeting with its lenders that took place in London on Friday. It hit a record low of R1.40 a share earlier in the week.
The group also said it expected to publish its third quarter update by August.
“The group is in the process of completing its reporting for the first half of the 2018 financial year and will publish the unaudited consolidated interim results of the group for the first half on June 29,” it said. However, it has estimated that its retail operations would deliver a 1percent increase in half-year revenue to 9.4billion (R141bn), up from last year’s preliminary restated 9.3bn.
The earnings before interest, tax, depreciation and amortisation (Ebitda) margin for the group’s retail operations for the six months is estimated, before taking into account central costs, foreign exchange losses on cross-currency loans and advisory fees, to be between 4percent and 5percent.
The group said this compared to a preliminary restated half-year 2017 Ebitda retail margin of between 5 and 6percent, calculated on an equivalent basis.
The group said that before the publication of the consolidated results it wished to provide guidance which reflected management’s current best estimates and remains subject to further review and change, pending finalisation of the reporting process around the performance of its retail operations, including supply chain and properties, but excluding central services and Poco retail operations.