Steinhoff International Holdings NV started the sale of 200 million shares in the embattled retailer’s African operations to settle debt and further shore up its balance sheet following an accounting scandal late last year.
The move follows similar disposals of stock in South Africa’s KAP Industrial Holdings Ltd. and investment holdings company PSG Group Ltd. The fund-raising initiatives are enabling Steinhoff to buy time from creditors as the owner of Conforama in France and Poundland in the U.K. struggles to recover from a 95 percent stock-price crash.
The shares in Steinhoff Africa Retail Ltd., known as STAR, earmarked for disposal were valued at 3.85 billion rand ($321 million), based on the closing price in Johannesburg Wednesday, and amount to about 6 percent of the company. Steinhoff currently holds a 77 percent stake in the owner of clothing chains including Pep and Ackermans and the placement will only be offered to institutional investors, Steinhoff said in a statement.
Steinhoff said Dec. 5 it had uncovered accounting irregularities and that Chief Executive Officer Markus Jooste has quit. PwC is investigating the accounts, with a particular focus on off-balance-sheet transactions related to the central Europe operations, and the company is being probed by a host of regulators and law authorities around the world.
The shares traded 4 percent lower at the close in Frankfurt, where the company moved its primary listing in 2015. Bloomberg News first reported the plan to sell STAR shares last month.