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JSE warns Steinhoff subsidiary over late financial reports

Feb 01 2018 14:14
Jan Cronje

Cape Town - The Johannesburg Stock Exchange has warned a subsidiary of Steinhoff that it will suspend trade in its rand-denominated bonds if it does not submit its annual report by the end of February. 

In a market update on Thursday morning, the JSE said that Steinhoff Services Limited had failed to submit its annual report within the four-month period stipulated in the JSE's listings requirements.

Steinhoff Services is a subsidiary of Steinhoff Africa Holdings, which in turn falls under Steinhoff Investment Holdings, which is the South African arm of the Steinhoff retail and household goods empire. 

The bonds of Steinhoff Services have a primary listing on the JSE, unlike the ordinary shares of its parent company Steinhoff International Holdings, which has a primary listing on the Frankfurt Stock Exchange and a secondary listing in Johannesburg 

The announcement does not apply to ordinary shares of Steinhoff International. 

“If Steinhoff Services fails to submit its annual report on or before 28 February 2018 then the notes and the registration of the programme memorandum of Steinhoff Services will be suspended in accordance with the provisions of the Debt Requirements,” said the JSE. 

Steinhoff has previously announced that it was considering the early redemption of the R7.6bn worth of bonds outstanding on the JSE. 

It has written to bondholders to ask for permission to reduce the maturity date of the notes to February 23, some five days before they would be suspended if it fails to submit its annual report. 

The JSE said it would also suspend trade in preference shares of Steinhoff Investments if its annual results were not submitted by the end of February. 

These shares are only listed on the JSE and not on the Frankfurt Stock Exchange. 

According to Steinhoff, these shares have a face value of R1.5bn.

Steinhoff has previously said it cannot give a date for when it will submit its delayed 2017 annual financial statements, as forensic investigators PwC would first have to complete their investigation into accounting irregularities at the firm. 

Trading as usual in Steinhoff parent company’s shares

The JSE said that it would not halt trade in shares of Steinhoff International, the group’s Dutch-domiciled parent company.  

These shares have lost over 80% of their value since early December, when Steinhoff’s former CEO Markus Jooste resigned amid an accounting scandal. 

The JSE said that, as these shares would continue to trade in Frankfurt, suspending the trade of these shares only on the JSE would place SA shareholders at a disadvantage. 

On Wednesday, JSE CEO Nicky Newton-King made similar arguments to a Parliamentary briefing on Steinhoff. 

Asked by committee members whether the JSE would halt trade in Steinhoff shares, Newton-King said the FSE had informed her that it would not be halting trade.  

"What suspension does is it stops individual investors from exiting a company. People would not have been able to trade out of it," she said. "We do not want to prejudice SA shareholdres."

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