Controversial South African retailer Steinhoff is said to sell its R7.5 billion worth of shares in investment firm PSG Group as it scrambles to plug a liquidity gap after it revealed “accounting irregularities” last year.
The group, which owns more than 40 brands including Conforama, Mattress Firm and Poundland, today revealed it would place around 29.5 million shares in PSG with institutional investors in an accelerated bookbuild. Steinhoff owns about 25% of PSG, which has a total market value of around R60 billion.
Last month, Steinhoff shocked investors by revealing its irregularities in its accounts which helped to wipe about $15 billion, or 85%, off its market value.
However, it its statement the retailer revealed that the placement would only go ahead if it achieved acceptable pricing.
“Steinhoff will not dispose of the Placing Shares at all costs, as the Placing is being undertaken in order to be pro-active and prudent,” it said.
Since the scandal, Steinhoff’s top two executives resigned, as well as its chairperson. The the group is currently being run by an acting chief executive while its former finance chief works full-time on securing financing.
Sources told Reuters last month that Steinhoff was considering selling shares worth $1.4 billion altogether in PSG Group and KAP Industrial to raise much-needed funds.
Steinhoff owns 39% of diversified industrial group KAP, which is worth around R22.4 billion at current market prices.