Crisis-hit Steinhoff cuts stake in KAP to 26%
Steinhoff is fighting for survival after admitting 'accounting irregularities' in December.
FRANKFURT/JOHANNESBURG - Steinhoff will sell part of its $700 million stake in KAP industrial, it said on Tuesday, part efforts by the scandal-hit South African retailer to plug a liquidity gap.
Steinhoff, which has more than 40 retail brands that include Conforama, Poundland and Mattress Firm, is fighting for survival after admitting 'accounting irregularities' in December, wiping about 85% off its market value and throwing it into a liquidity crisis.
The company said it would sell 450 million shares, or 17% stake, in KAP via an accelerated bookbuild - a move that would reduce its holding to 26% - to raise cash for repaying debt.
“Steinhoff continues to view KAP as a compelling investment case, especially in view of recent events in South Africa and the prospect of improving economic conditions,” Steinhoff said in a statement.
The election last month of Cyril Ramaphosa, who has promised to fight corruption and kick-start the economy, has lifted confidence among business leaders in Africa’s most advanced economy.
KAP is a diversified industrial group involved in the selling of everything from chemicals, auto components and mattresses.
Steinhoff has already raised R7.1 billion from the sale of a stake in investment firm PSG Group as part of efforts to shore up its finances.
Standard Bank and Investec joint arrangers of the accelerated bookbuild.