Steinhoff shares rally another 24% as European subsidiary secures funding
Steinhoff International’s mini share-price rally continued on Thursday after the Financial Times reported that the beleaguered retailer’s European business had borrowed £180m from a hedge fund in the US.
Shares in Steinhoff were up 24% at R8.52 in afternoon trade on Thursday. They have risen about 82% in the first few trading days of 2018.
This comes after the retailer’s value slumped nearly 90% in the wake of an accounting scandal that led to former CEO Markus Jooste’s resignation.
Steinhoff said this week it would also have to restate its numbers from 2015 and possibly earlier.
The Financial Times said on Wednesday the two-year loan facility for the European business had been provided by hedge fund Davidson Kempner, citing two people briefed on the arrangement.
Pepkor Europe, which owns Steinhoff’s discount retailers in Europe, said the loan meant it was "now not dependent on working capital support from parent company Steinhoff International".
Some of the funding was set aside for Harveys and Bensons for Beds, which are not held under Pepkor Europe. The furniture chains said the cash injection would replace investment funds they had been due to receive from Steinhoff, according to the Financial Times.
The publication cited Steinhoff’s Andy Bond as saying the European businesses were "firing on all cylinders, adding customers and market share. They are all independent, profitable, delivering positive cash flows."
Steinhoff’s European operations include Pepco and Poundland, which on Wednesday reported a 5.6% increase in sales for the 12 weeks to December 24.