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Steinhoff units seek 'significant' funding as CFO steps down

Jan 05 2018 10:55
Vernon Wessels, Bloomberg News

Johannesburg - Steinhoff International Holdings [JSE:SNH], the global retail giant consumed by an accounting scandal, said some of its business units need “significant near-term liquidity” as its chief financial officer stepped down to focus on rescue efforts.

CFO Ben la Grange will be replaced by Philip Dieperink, finance chief for the company’s UK subsidiary, the owner of France’s Conforama and Mattress Firm in the US said on Thursday. La Grange will also work on completing the 2017 financial statements, while Steinhoff said it is seeking a chief restructuring officer to help rearrange its debt.

The company remains “committed to work with its lenders and other finance providers in finding solutions and to return liquidity to the group in order to stabilise the affected underlying operations,” Steinhoff said in a statement. It said it has “achieved some degree of stabilisation in its operating businesses.”

The company’s Pepkor Europe unit has received a £180m ($244m) loan facility to replace planned investment from Steinhoff, according to a statement from Pepkor’s Poundland unit in the UK. Steinhoff shares lost most of their value in the days following the December 5 announcement of an investigation into its finances and the resignation of its chief executive officer. The stock rose more than 25% in Johannesburg and Frankfurt on Thursday, extending a six-day rally.

By 10:29 on Friday morning the shares were changing hands at R8.69, 1.05% firmer than Thursday's close.

The retailer said on Tuesday that its 2017 results will be accompanied by a restatement of its 2016 financial statements as well as the 2015 earnings of Steinhoff International Holdings Pty Ltd, the former Johannesburg-listed entity for the group.

Steinhoff moved its primary stock listing to Frankfurt in 2015. The restatements won’t affect its Steinhoff Services Ltd business, which has bonds listed in Johannesburg.

Moody’s Investor Services last week downgraded the company’s credit by three notches, its second multi-step cut since the scandal and taking the Steinhoff deeper into junk. The ratings provider kept Steinhoff on review for further downgrades, saying the company may face challenges in being able to repay or refinance debt maturing this year.

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