FILE PHOTO: A Poundland employee checks products in a store in London
Steinhoff to meet to discuss asset sales, debt repayments
By Wendell Roelf
CAPE TOWN (Reuters) - Steinhoff's board will meet over the next two days to discuss asset sales to boost cash flow and pay down debt, its chairwoman said on Wednesday, months after creditors of the South African retailer threw it a lifeline.
Steinhoff had been fighting for survival since December last year when it uncovered accounting irregularities that sent its shares crashing and left it scrambling for working capital.
In July, its creditors agreed to hold debt claims for three years, removing a imminent threat of default that would have tipped the company into bankruptcy.
"They (banks) have given us three years until 2021 to, in a considered way, decide which assets we sell and how we will bring down the debt," Heather Sonn said.
"A key consideration there is that the assets that remain have to be able to generate a cash flow and service the remaining debt."
Steinhoff, which has more than 40 brands that include Conforama, Mattress Firm and Poundland, has already sold assets that include its Polish unit Kika/Leiner, as well as a stakes in investment holding firm PSG and industrial firm KAP.
Pepco, a clothing and footwear chain in central and eastern Europe, is seen as one of the names next in the block, a source close the matter said.
Sonn was speaking before a South African parliamentary committee which is investigating the scandal. The affair is also under investigation by accounting firm PwC.
PwC INVESTIGATION ON TRACK
She told the parliamentary panel an investigation by PwC was on track to be largely completed by year-end, sending its shares more than 13 percent higher.
"There is probably belief in the market that the PwC report will provide some more clarity and the market is just happy that we might finally get some answers," Greg Davies, Cratos Capital.
Steinhoff shares jumped 7.7 percent to 2.37 rand, valuing it at around 10 billion rand ($696 million), a dramatic fall for the company that was valued at more than 200 billion rand before the scandal broke.
Steinhoff's former chief financial officer Ben La Grange, who was questioned by the parliamentary panel on Wednesday, denied any wrongdoing in Steinhoff bookkeeping practices.
He told the panel he was misled into believing the company's profits and third party deals were above board.
"From my side, I also do not think I did anything deliberately wrong," said La Grange, who stepped down as CFO in January to focus on helping the group to plug a liquidity gap.
Former chief executive Markus Jooste is due is due to appear next week before the committee next Wednesday, co-chair of the committee, Themba Godi, told Reuters.
Jooste would be speaking publicly for the first time since he abruptly resigned following the discovery of multibillion rand holes in Steinhoff's accounts.
He was an instrumental figure in the transformation of Steinhoff from a small Johannesburg furniture outfit into multinational retailer with more than 40 brands in the United States, Europe, Africa and Australia.
($1 = 14.3618 rand)
(Additional reporting Patricia Aruo; Writing by Tiisetso Motsoeneng; Editing by James Macharia and Jane Merriman)
First Published: 2018-08-29 10:19:21
Updated 2018-08-29 17:39:50
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