Steinhoff, Stellenbosch. Photo: David Harrison - [email protected]
JOHANNESBURG - Steinhoff International yesterday slumped nearly 5percent on the JSE after reports that Mayfair Holdings, a personal investment company owned by disgraced former chief executive Markus Jooste, has reportedly hired two business-rescue practitioners to sell some of its assets to repay its creditors.

The Companies and Intellectual Property Commission revealed that Mayfair yesterday hired Piers Marsden and Leslie Matuson of Matuson & Associates as directors.

The news sent Steinhoff’s shares into a further fall of 4.21percent to close at R1.82c.

Mayfair Holdings was apparently given until the end of the year to pay back the loans that were backed by Steinhoff International.

Jordan Weir, an equities trader at BayHill Capital, said the move was as a result of Mayfair loans being backed by Steinhoff shares.

Weir said the business rescue practitioners would look at the most cost-effective way of recouping as much of these loans as possible through mass sale of Mayfair's assets.

“In South Africa, it is understood that between 10percent and 12percent of business rescues are successful,” Weir said.

“Taking into account the size of the recent Steinhoff saga, coupled with these low success rates in business rescue, one could assume that the story may not end too well for Mayfair in the longer run.”

The move comes as Steinhoff continues to offload assets following the accounting irregularities scandal that cost the retailer more than R200million in market capitalisation after its shares went on a downward spiral, shedding 95percent.

The scandal resulted in Jooste’s abrupt resignation.

Mayfair is currently locked in a battle to sell Rascals Sweets and Fusion soft drinks to pay its debt.

Weir said Steinhoff had to prove fair chance of financial recovery, after a period of financial rehabilitation and supervision by business rescue practitioners, by going into business rescue.

“Interestingly, this particular business rescue case seems to have been implemented more in favour of the broader underlying shareholder and stakeholder, given the devastation that has been seen on shareholder value,” Weir said.

Last week, Steinhoff International said its acting chief executive Danie van der Merwe repaid a R26.4m loan backed by company shares that he took out a week before the retailer’s stock collapsed because of an accounting scandal.

Van der Merwe’s personal investment company, Ruby Street Investments, had borrowed the funds from Investec on November 29, the same day that companies owned by Jooste and his son-in-law Stefan Potgieter took out a R93m loan from the same bank, according to a court filing by Investec in December.

Matuson & Associates is a South African turnaround business rescue practice that specialises in business rescue appointments, measuring and improving corporate performance and implementing turnarounds.

It was founded in 2009 and has a multi-disciplinary team with vast experience across sectors including retail, automotive, property and mining.

Marsden has worked on some of the largest distressed corporate restructurings in South Africa in the past 10 years.

He is a respected senior business rescue practitioner and has taken high-profile appointments in Optimum Holdings and Highveld Steel, which are large complex matters with national significance.

Nesan Nair, a senior portfolio manager at Sasfin Securities, said the company could be sitting with debt that was used to buy assets in the form of Steinhoff shares.

“With the shares now worth less, debts levels are greater than assets, which means the companies are probably insolvent, hence the need to go to business rescue,” Nair said.