INTERNATIONAL - South African retailer Steinhoff International said on Friday it might issue stock as part of efforts to resolve claims brought against it through lawsuits related to an accounting fraud worth an estimated $7 billion.
Steinhoff has been battling with the fallout from the scandal after flagging holes in its accounts in December 2017. The company is fighting for its survival, having declared billions of dollars in losses and seen its shareholder equity wiped out.
The retailer said it was preparing its defences in relation to various claims being made against it as a result, but would consider early resolution of these including via settlement arrangements permitted as part of a financial restructuring implemented in August.
“These arrangements may include, among other options, an equity issuance by Steinhoff,” the company said in a statement to the stock exchange.
It was unclear from the statement whether this referred to a rights issue or shares issued to claimants as part of settlements. A spokesman said various options were being considered.
The statement said that given the complexity involved there was no guarantee that the multi-billion claims could be resolved before judgements in the courts.
The company’s Johannesburg-listed stock regained some losses following the announcement on Friday, and was down 1% by 0826, having dropped 3% earlier in the day.
Steinhoff’s statement also said it had concluded a refinancing of the banking facilities for fast-growing unit Pepco Group, owner of Britain’s Poundland, which would reduce financing costs and support its business plan.
The retailer has previously said it is looking into a range of options for that business, including potentially an initial public offering.
On Friday, it said that plans were in the very early stages and firm decisions had yet to be made.