Cash-strapped Steinhoff announces plans to sell 6,5% of SA’s largest retailer Pepkor

Debt-ridden Steinhoff International has made an announcement that it intends to sell up to 6,5% of Pepkor.

Steinhoff said on Wednesday that this move will mean it loses its majority stake in South Africa’s largest clothing and household ware retailer by store footprint.

Based on Pepkor’s closing price on Wednesday, the sale could net Steinhoff about R4.7 billion, with the intention to use the proceeds to decrease its debt. 

As things stand, the embattled Steinhoff owns 51% of Pepkor, and successful placement of the shares would mean it would retain 44.5% ownership of the store whose brands include Ackermans, Shoe City, JD Group, and The Building Company.

“The company would remain Pepkor’s biggest shareholder, with its second-biggest shareholder being the Public Investment Corporation (PIC), which held 6.2% of the retailer as of the end of its 2022 year,” reports Fin24.

“Steinhoff, valued at only R1.87 billion on the JSE, is still battling with about a €10.2 billion (R191 billion) debt pile, and announced in December that it had reached a deal with its largest creditors, which could see it holding 80% of the company.”

“Shareholders, who would retain 20%, are expected to vote on this by next month, and once approved, then the company would then delist.”

In January, Steinhoff also sold a 6% chunk of its stake in pan-European retailer Pepco, raising €315.2 million (R5.8 billion) and this took the group’s stake to 73.2%, from 78.9% previously.

Steinhoff’s announcement came as the Johannesburg Stock Exchange closed on Wednesday, when its shares fell 12%, having lost more than 82% over the past six months.