Steinhoff confirms 2015 results to be restated
The announcement underscores the extent of an accounting scandal that has wiped billions of dollars off the market value of the South African retailer.
JOHANNESBURG - Steinhoff said on Tuesday that its 2015 results would have to restated, underscoring the extent of an accounting scandal that has wiped billions of dollars off the market value of the South African retailer.
Last month, rating agency Moody’s cut its rating for Steinhoff International Holdings to Caa1, seven notches into junk, warning that further downgrades could follow due to mounting cash flow problems at the retail group.
Steinhoff, the owner of many European and US brands, told investors in December it was losing credit lines from lenders over the scandal.
This was after veteran CEO Markus Jooste quit and the company came under scrutiny from local and overseas regulators.
Moody’s, which had already downgraded Steinhoff’s credit rating earlier in December, says the new rating reflects a “substantial risk” of default.
Steinhoff has $2 billion of term loans maturing between 2018 and 2020, and the interest rate payable on the loans is expected to soar to around 250 to 280 basis points, above the benchmark lending rate of European banks following the downgrades.
The company has yet to explain in full what has been called “accounting irregularities”.
The Independent Regulatory Board for Auditors (IRBA) has confirmed that it is investigating Steinhoff's auditors, Deloitte.
CEO Bernard Agulhas said that they'll probe audits of financial years dating back to 2014.
"The years that we will be investigating will be the financial years ended in 2014, 2015 and 2016 and we will specifically be investigating the audit of Steinhoff International PTY Limited, which is the local subsidiary of Steinhoff."
Additional reporting by Ray White.