Moody’s casts further doubt over Steinhoff with latest downgrade
This is the agency’s second downgrade of the company in a month, and reflects its belief that there is a ‘substantial risk’ of a debt default
Steinhoff International’s debt was further downgraded by ratings agency Moody’s on Thursday, putting the company deeper into junk status. They warned further downgrades could follow due to the ongoing cash crisis facing the company in the wake of the accounting scandal that led to the resignation of CEO Markus Jooste. Moody’s said Steinhoff’s financial situation has been under strain following more than $12bn being wiped off its market value after the news of accounting irregularities at the firm broke. Furthermore, Steinhoff told investors this month that it was losing credit lines from some lenders. Moody’s, which had already downgraded Steinhoff’s credit rating earlier this month, cut its rating for Steinhoff International Holdings to Caa1, the seventh tier into junk territory. The additional downgrade reflected the increasing pressure on the company’s liquidity, Moody’s said. “The situation has been compounded by its operating companies placing an additional liquidity burden on ...
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