Jayendra Naidoo, the chairman of Steinhoff Africa Retail (STAR), says, in the unlikely event that Steinhoff decided to sell its entire 77% stake in STAR, there would be little difficulty in placing the shares with institutional investors.
In 2017, Steinhoff injected its holdings in Pep, Ackermans and JD to form STAR, which was listed on the JSE in September.
Selling its STAR stake at the current market price would generate about R60bn for cash-strapped Steinhoff.
In the past few months Steinhoff has sold stakes in PSG, raising R7.1bn, and in KAP Industrial, raising R3.7bn.
Naidoo was speaking after the group’s first annual general meeting, at which he told shareholders that Steinhoff had indicated it might sell a small block of STAR shares. However, he said "there was no indication it would be significant".
One trader said it was frustrating that there was still so little news about the extent of the problems at Steinhoff but, given all the uncertainty, the market believed that anything was possible. The sale of its STAR stake was "a definite possibility".
During the meeting, shareholder activist Theo Botha raised concern about the hefty amount of goodwill — R2.2bn — included in the R3.35bn purchase of Tekkie Town from Steinhoff. He said a transaction in November 2014 had valued the company at R1.7bn.
In 2016 Steinhoff bought 42% of Tekkie Town from private equity firm Actis and the remaining 58% from Braam van Huyssteen, who founded Tekkie Town and was subsequently appointed chairman of STAR’s property committee.
Shortly after the 2016 transaction, Van Huyssteen, who is reported to own 175 horses, told journalists he had bought a share in a horse with former Steinhoff CEO Markus Jooste.
"Markus had just purchased my business, we’d become friends and the least I could do was take a share in a horse with him," said Van Huyssteen.
STAR CEO Leon Lourens told shareholders at Thursday’s meeting that Tekkie Town had been acquired as part of the formation of STAR.
He said based on its performance, the board believed the R3.35bn price tag for the footwear chain was reasonable.
During the meeting, directors made several references to the need to distance the company from Steinhoff.
"Since December our priorities have been to distance STAR from Steinhoff and make ourselves financially independent," Lourens told the meeting.
He said the refinancing of Steinhoff loans was expected to be completed by the end of March, at which stage the cross-guarantees would be cancelled.
"When this is completed we will be much better off," he said.
Naidoo said a name change was under discussion and he hoped there would be a new name for the firm before the 2019 annual general meeting.