Steinhoff mulls issuing new shares as it seeks 'early resolution' of litigation | Fin24
 
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Steinhoff mulls issuing new shares as it seeks 'early resolution' of litigation

Nov 08 2019 11:44
Jan Cronje

Steinhoff says it may consider issuing new shares to cover the "early resolution" of litigation claims against it for the precipitous drop in its share price since late 2017.

In a monthly update to shareholders on Friday, the Stellenbosch-headquartered global retailer said it was facing legal action in South Africa, the Netherlands and Germany.

"As part of its overall litigation strategy, Steinhoff will also consider early resolution of the claims brought against it and the possibility of using the permitted settlement arrangements introduced into the new terms of the Steinhoff finance documents and approved as part of the financial restructuring implemented in August 2019," it said. "These arrangements may include, among other options, an equity issuance by Steinhoff."

The group, which is domiciled in the Netherlands and has its primary listing in Germany, has created a special litigation working group, which falls under its supervisory board, to deal with court cases against it and institite claims against other parties. 

Steinhoff's share price has plunged by over 95% since December 2017, when its former CEO Markus Joost abruptly resigned at the start of an accounting scandal. This lead to the delay and restatement of its 2018 and 2017 financial results, which have now been finalised.

On Friday at 11:10, Steinhoff shares were trading at 95c a share, down 3% on the day. On the day before Jooste announced his resignation, meanwhile, Steinhoff was trading at around R46 a share.

steinhoff  |  markus jooste
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